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Issues Involved: Appeal against demand of Service Tax, penalties under Sections 76 and 78 of the Finance Act, 1994.
Summary: The appeal was filed against an order confirming a demand of Service Tax with interest and imposing penalties under Sections 76 and 78 of the Finance Act, 1994. The appellant contended that they had not provided any service liable for Service Tax, citing an Agreement with Dhoot Compack Ltd where they only guaranteed solvency of the customer and were not responsible for payment recovery. The Revenue argued that the appellants guaranteed payment to the principal in case customers failed to pay, falling under Business Auxiliary Service as per the Finance Act, 1994. The Tribunal found that the appellants, by evaluating prospective customers and guaranteeing collection of dues, were correctly classified under Business Auxiliary Service, dismissing the appeal. In the present case, the appellant disputed the demand of Service Tax on the grounds that they did not provide any service liable for such tax, based on an Agreement with Dhoot Compack Ltd. The Revenue argued that the appellants, by guaranteeing payment to the principal in case of customer default, fell under Business Auxiliary Service as defined in the Finance Act, 1994. The Tribunal upheld the demand, stating that the appellants' activities aligned with the definition of Business Auxiliary Service, leading to the dismissal of the appeal. The appellant's reliance on a previous Tribunal decision regarding a different category of service was found to be inapplicable to the current case, as the demand in question pertained to Business Auxiliary Services covering activities related to prospective customer failures and guarantee for collection. The Tribunal concluded that the appellants' actions, as per the Agreement, justified the demand under Business Auxiliary Service, resulting in the dismissal of the appeal.
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