Job-work based loading and unloading not manpower supply; penalty deleted for lack of wilful suppression, while GTA tax stood confirmed

Loading and unloading work was not taxable as manpower recruitment or supply agency service under reverse charge where payment was made on a job-work basis for quantified work performed, rather than for supply of manpower; the related tax demand, interest and penalty were set aside. By contrast, the goods transport agency service demand and interest were upheld, but penalty was deleted because the assessee was registered, filed returns regularly, and no material showed wilful suppression of facts with intent to evade tax.

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Issues: (i) Whether services received for loading and unloading of materials were taxable as manpower recruitment or supply agency service under reverse charge mechanism. (ii) Whether penalty was sustainable in relation to the upheld goods transport agency service demand.

Issue (i): Whether services received for loading and unloading of materials were taxable as manpower recruitment or supply agency service under reverse charge mechanism.

Analysis: The service recipient was found to have engaged parties for loading and unloading work, with payments made on the basis of the quantum of job performed and not on the basis of manpower supplied. The statutory definition of manpower recruitment or supply agency service contemplates supply of manpower, directly or indirectly, temporarily or otherwise, and the billing pattern was inconsistent with taxation on manpower supply.

Conclusion: The demand of service tax under manpower recruitment or supply agency service was not sustainable and was set aside, along with the connected interest and penalty.

Issue (ii): Whether penalty was sustainable in relation to the upheld goods transport agency service demand.

Analysis: The goods transport agency service demand was accepted, but the record showed registration with the department, regular filing of returns, and assessment based on those returns. No corroborative material established wilful suppression of facts with intent to evade tax, so the penal consequence was not justified.

Conclusion: The penalty relatable to the goods transport agency service demand was set aside, while the tax demand and interest were upheld.

Final Conclusion: The appeal succeeded on the classification dispute and on the penalty question, but the goods transport agency tax liability remained confirmed.

Ratio Decidendi: A service is not taxable as manpower recruitment or supply agency service when payment is made for the job executed on a quantified-work basis rather than for supply of manpower, and penalty cannot be sustained absent proof of wilful suppression with intent to evade tax.

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