Manpower supply classification failed where contracts were output-based work orders, and extended limitation lacked proof of suppression.

A lump sum or job-work contract based on output, where payment was linked to work done and not to the number of persons deployed, was not treated as Manpower Recruitment or Supply Agency Service because the agreements did not require supply of a quantified workforce and the work remained the contractor's responsibility. The demand therefore failed on merits. The extended period was also held unavailable because non-registration and non-filing of returns, without positive material showing suppression of facts and intent to evade tax, did not justify extended limitation. Related penalties were unsustainable, and consequential relief followed.

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Issues: (i) whether the activities undertaken under the agreements amounted to Manpower Recruitment or Supply Agency Service; (ii) whether the extended period could be invoked in the absence of suppression of facts and intent to evade tax.

Issue (i): whether the activities undertaken under the agreements amounted to Manpower Recruitment or Supply Agency Service.

Analysis: The service definition under Section 65(68) of the Finance Act, 1994 covers supply or recruitment of manpower. The agreements showed execution of specified works on lump sum or job-work basis, with payment linked to output and not to the number of persons deployed. The contracts did not specify any obligation to supply a quantified workforce, and the work remained the appellant's responsibility. Mere deployment of labour for execution of work did not, by itself, establish manpower supply.

Conclusion: The activity did not fall under Manpower Recruitment or Supply Agency Service, and the demand was not sustainable on merits.

Issue (ii): whether the extended period could be invoked in the absence of suppression of facts and intent to evade tax.

Analysis: Non-registration and non-filing of returns, by themselves, do not amount to suppression unless there is positive material showing deliberate concealment with intent to evade tax. No such material was established on the record. Since the underlying demand failed on classification, the penalties also could not survive.

Conclusion: The extended period was not invokable, and the related penalties were unsustainable.

Final Conclusion: The appeal succeeded in full and the assessee obtained consequential relief.

Ratio Decidendi: A contract is not taxable as manpower recruitment or supply service unless it is shown to be for supply or recruitment of manpower as such; lump sum work contracts based on execution of work and output do not attract that levy, and extended limitation cannot rest merely on non-registration or non-filing without proof of intent to evade.

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