Reverse charge manpower supply demand failed where evidence showed lump-sum works contract services instead of manpower supply.

Service tax demand under reverse charge for alleged supply of manpower services failed because the audit material and show cause notice were inconsistent on the nature of the transaction. The Tribunal found that the underlying work described in the spot memo related to works contract activities such as plastering, brickwork and concreting, while the demand was framed as manpower supply. Documentary evidence and the Chartered Accountant's certificate showed that the sub-contractors rendered lump-sum works contract services, not manpower services, except for one isolated instance where tax had already been paid. On those facts, the confirmed demand could not stand and was set aside.

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Issues: Whether the demand of service tax on the footing that the appellant received "Supply of Manpower Services" under reverse charge was sustainable.

Analysis: The Tribunal found that the spot memo and the show cause notice did not match on the nature of service, as the audit material described the activity as works contract related to plastering, brickwork and concreting, while the demand was raised as manpower supply. The documentary material and the Chartered Accountant's certificate showed that the sub-contractors rendered lump-sum works contract services and not manpower services, except in one isolated instance where tax had already been paid. On this factual basis, the Tribunal held that the appellant had not availed manpower services and that the confirmed demand could not stand.

Conclusion: The demand was set aside and the appeal was allowed.

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