Lump-sum work contract for stone crushing held outside manpower supply services, with tax demand and penalties set aside.

A lump-sum, rate-contract arrangement for crushing stones and related work was treated as execution of work rather than manpower supply. The tribunal reasoned that a composite contract does not become a manpower supply service merely because labour is deployed to perform it. Applying that principle, the activity was held outside the scope of manpower supply services. As a result, the service tax demand, interest and penalties were set aside.

---

---

Issues: Whether the activity of executing a lump-sum contract for crushing stones and related work fell within the category of manpower supply services and attracted service tax.

Analysis: The appellants were found to be executing the work on a lump-sum, rate-contract basis rather than merely supplying manpower. A similar arrangement had already been held by the Tribunal to be outside the scope of manpower supply services, because a composite work contract executed for a fixed consideration does not become manpower supply merely due to the deployment of labour. Following that precedent, the activity was examined as a contract for execution of work and not as a service of supplying manpower.

Conclusion: The activity did not fall under manpower supply services, and the service tax demand, interest, and penalties were set aside.

---