Manpower supply service scope and new appellate grounds cannot sustain a tax demand when not pleaded in the original notice.

Supplying labour on a daily basis for loading and unloading trucks/LCVs did not fall within the statutory meaning of manpower recruitment or supply agency service, because the activity was merely labour supply for work and not recruitment or supply of manpower to another person; no service tax was payable on that basis. A demand also could not be sustained on the new appellate ground that tax had been collected from the client and not deposited, because that factual basis was neither alleged in the show cause notice nor recorded in the original adjudication order; the appellate finding was therefore unsustainable. The demand, penalty and related adverse findings were set aside, and the appeal was allowed with consequential relief.

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Issues: (i) Whether supplying labour on a daily basis and loading and unloading of trucks/LCVs amounted to taxable service under the category of manpower recruitment or supply agency; (ii) whether the demand could be sustained on a ground that the service tax had been recovered from the client and not deposited, when such a case was not made out in the show cause notice or the order-in-original.

Issue (i): Whether supplying labour on a daily basis and loading and unloading of trucks/LCVs amounted to taxable service under the category of manpower recruitment or supply agency.

Analysis: The service description showed only supply of labour for daily work and loading and unloading activities. Such activity did not answer the statutory description of manpower recruitment or supply agency, which contemplates recruitment or supply of manpower to another person.

Conclusion: The activity was not covered by the definition of manpower recruitment or supply agency and no service tax was payable on that count.

Issue (ii): Whether the demand could be sustained on a ground that the service tax had been recovered from the client and not deposited, when such a case was not made out in the show cause notice or the order-in-original.

Analysis: The finding that tax had been recovered from the client and not deposited was introduced for the first time at the appellate stage. That basis was neither alleged in the show cause notice nor in the order-in-original, and the demand could not be sustained on a ground beyond the pleaded foundation.

Conclusion: The appellate finding on that basis was unsustainable in law.

Final Conclusion: The demand, penalty, and related adverse findings were set aside and the appeal was allowed with consequential relief according to law.

Ratio Decidendi: A demand cannot be sustained on a ground not set out in the show cause notice or original adjudication order, and supply of labour for daily work and loading and unloading does not by itself constitute manpower recruitment or supply agency service.

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