Manpower supply classification fails where a contractor performs assigned cleaning and handling work through its own workforce, defeating tax demand.

Taxability turned on whether a contract for washing, stacking bottles, and cleaning operational areas constituted manpower recruitment or supply agency service under the Finance Act, 1994. The material explains that where the contractor undertakes specified work through its own manpower, without an obligation to place personnel at the disposal of the distillery, the arrangement is characterised as execution of work rather than supply of manpower. On that construction, the allegation of manpower supply lacked factual basis, and the service tax demand was stated to be unsustainable. The note also records that the issue was treated as covered by an earlier similar decision.

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Issues: Whether the activity performed under the contract was liable to service tax as manpower recruitment or supply agency service under Section 65(105)(k) of the Finance Act, 1994.

Analysis: The contract was examined and found to relate to washing activities, stacking bottles in the godown, cleaning the washing area, bottling area, blending area, and godown servicing through the contractor's own manpower. The contract did not require the appellant to supply manpower to the distillery. On that construction, the departmental allegation that the arrangement was a manpower supply service was held to have no factual basis. The issue was also treated as covered by the earlier decision in a similarly placed matter.

Conclusion: The activity was not taxable as manpower recruitment or supply agency service, and the demand could not be sustained.

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