Manpower supply test turns on control and supervision, not lump-sum payment, for specific job contracts

Services involving scaffolding, duct work, removal of spillage material and housekeeping were examined to determine whether they amounted to manpower supply liable to service tax under reverse charge. The decisive test was whether labour was placed under the recipient's control and supervision; where the contractor undertook specific jobs on a lump-sum basis and retained responsibility for execution, the arrangement was not manpower recruitment and supply agency service. Mere deployment of labour or lump-sum payment did not convert a works contract for specified tasks into manpower supply. On that basis, the tax demand was held unsustainable and consequential relief followed.

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Issues: Whether the services received for miscellaneous jobs such as scaffolding, duct work, removal of spillage material and housekeeping constituted manpower supply service so as to attract service tax under reverse charge mechanism.

Analysis: The activity was found to be a contract for carrying out specified jobs on a lump-sum basis and not a deployment of manpower for the appellant's control and supervision. The decisive factor was the nature of the work entrusted to the contractor, not the mere mode of payment. Where labour is engaged to perform specific operational tasks under the contractor's responsibility, the service does not become manpower recruitment and supply agency service merely because payment is made on a lump-sum basis.

Conclusion: The disputed service was not manpower supply and no service tax was payable on that basis under reverse charge mechanism.

Final Conclusion: The demand was unsustainable on merits and the appeal succeeded, with consequential relief to the appellant.

Ratio Decidendi: A contract for execution of specific jobs does not amount to manpower supply merely because labour is deployed for performing the work or payment is made in a particular manner; the relevant test is whether manpower is placed under the recipient's control and supervision.

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