Job-work fabrication is not manpower supply when labour is used independently and charges are based on work done, not man-hours.

Fabrication work executed on a job basis with charges linked to quantity of work, not manpower supplied or man-hours consumed, was not classifiable as Manpower Recruitment or Supply Agency Service. The documents showed no supply of labour under the recipient's control or supervision, and mere use of labour to perform the job did not convert the contract into manpower supply. The activity was noted as potentially falling within Business Auxiliary Service as production or processing on behalf of a client, but the demand had not been raised under that head. The classification adopted in the demand was therefore unsustainable and the impugned order was set aside.

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Issues: Whether the appellant's fabrication activity, carried out with its own labour and charged on job basis, was classifiable as Manpower Recruitment or Supply Agency Service and, if not, whether the demand could still survive.

Analysis: The activity was found to be a fabrication job undertaken for the service recipient, with charges raised on the basis of quantity of work and not on the basis of manpower supplied or man-hours consumed. The documents showed no supply of manpower under the control or supervision of the recipient. Mere use of labour for executing a job did not, by itself, convert the transaction into manpower supply. On that basis, the service was held not to fall under Manpower Recruitment or Supply Agency Service. It was further noticed that the activity would, at best, fall within Business Auxiliary Service under production or processing on behalf of the client, but the demand had not been proposed under that head. The exemption plea under Notification No. 08/2005-ST was also noticed in support of the appellant's case.

Conclusion: The classification adopted in the demand was unsustainable and the demand could not be maintained on the basis adopted by the Revenue.

Final Conclusion: The impugned order was set aside and the appeal was allowed.

Ratio Decidendi: A fabrication contract charged on job basis, without supply of manpower under the recipient's control, is not taxable as manpower recruitment or supply agency service merely because labour is used in executing the work.

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