Service tax classification and penalty issues under the Finance Act, 1994 led to a split opinion on demand sustainability.

Business Support Service classification, limitation, cum-tax valuation, statutory exclusions and penalty exposure under the Finance Act, 1994 were in issue before CESTAT Chennai. The text records that members agreed on several points but differed on whether the Business Support Service demand was sustainable and whether penalty under section 76 was leviable. It also notes that the remaining service tax demands and related penalties were said to require modification on the stated grounds, but no final majority disposition on the disputed points is recorded.

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Issues: Whether the demand under Business Support Service was sustainable; whether penalty under section 76 of the Finance Act, 1994 was leviable; and whether the remaining service tax demands and related penalties required modification on the grounds of classification, limitation, cum-tax valuation, and statutory exclusions.

Outcome: The appeal resulted in a split opinion, with agreement on several issues and divergence on the sustainability of the Business Support Service demand and penalty under section 76 of the Finance Act, 1994. No final majority disposition on the disputed points is recorded in the text.

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