Manpower supply classification failed where piece-rate production work and contractor control showed a works arrangement, not manpower supply.

Processing and production work carried out in the recipient's premises on a piece-rate basis was not classifiable as Manpower Recruitment or Supply Agency Service where the agreement showed that the contractor remained responsible for output, quality control, labour supervision, and wage . The available material did not establish that the real nature of the arrangement was supply of manpower, and bank entries or general allegations were insufficient to override the contractual terms and factual position. The Board circular relied on by the revenue did not displace this evidence. The demand was therefore not sustainable.

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Issues: Whether the appellant's activity of carrying out processing or production work in the recipient's premises on a piece-rate basis was classifiable as Manpower Recruitment or Supply Agency Service.

Analysis: The agreement and its annexure showed that the contractor was engaged to perform production-related work on a piece-rate basis, with responsibility for output, quality, supervision of labour, and payment of wages resting on the contractor. The available material did not establish that the arrangement was one for supply of manpower. The department relied mainly on bank entries and general allegations, but no conclusive evidence was brought to show that the essence of the transaction was manpower supply. The Board circular relied upon by the revenue did not displace the contractual terms and the factual position reflected in the agreement.

Conclusion: The activity was not classifiable as Manpower Recruitment or Supply Agency Service and the demand could not be sustained.

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