Tribunal confirms service tax demand against sourcing agent; bonafide belief defense dismissed.

The tribunal upheld the Order-in-Original and Order-in-Appeal, confirming the demand for service tax, interest, and penalties against a proprietary concern acting as a sourcing agent under Business Auxiliary Service. The appellants' argument of a bonafide belief defense was dismissed for lack of evidence or justification, leading to the rejection of their appeal.

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Issues:
1. Appeal against Order-in-Appeal upholding Order-in-Original demanding service tax, interest, and penalties.
2. Applicability of Business Auxiliary Service to a proprietary concern acting as a sourcing agent.
3. Bonafide belief defense regarding service tax liability.

Analysis:
1. The appeal was filed against the Order-in-Appeal upholding the Order-in-Original, which confirmed the demand of service tax, interest, and penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The extended period was invoked due to wilful misstatement/suppression of facts.

2. The appellants, a proprietary concern, were providing services as a sourcing agent for a company and were covered under Business Auxiliary Service liable to service tax. The agreement clearly stated their role in marketing and sourcing customers for the company's products, leaving no ambiguity about their coverage under the Business Auxiliary Service. The contention that they were not a commercial concern was dismissed as they were engaged in commercial activity. The appellants' argument of being under a bonafide belief that they were not providing the service was deemed hollow and untenable as they failed to provide any basis or grounds for such belief. The absence of any justification for their belief rendered it invalid, and the appellants could not demonstrate how such a belief could have been formed.

3. The tribunal found that the appellants failed to demonstrate any infirmity in the findings of the Order-in-Original and the Order-in-Appeal. The lack of ambiguity or confusion regarding their service tax liability and commercial status led to the rejection of their appeal. The tribunal upheld the impugned order, concluding that the appellants had not shown any grounds to support their purported bonafide belief, and therefore, the appeal was rejected.

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