Hi Gopal
Yes, Party is mainly used for B2B scenarios as described by the documentation below.
A communication party (party for short) represents a larger unit, which is involved in a collaborative process. Using a communication party, you generally address a company within a business-to-business process.
Communication Party - Integration Directory - SAP Library
Usually, Business System is created in SLD for systems within the companies landscape. As such, it does not make good sense to assign a business system to an external party (although it is technically possible.) You can however assign a Business System to a party that is created to represent your company.
Some adapters require the information configured in the Identifiers of Party in order for configuration to work, i.e. AS2 ID for Seeburger AS2 Adapter, Partner Number for Customer/Vendor based IDoc partner profile.
Rgds
Eng Swee