In Brief
A manpower supply company sought exemption from service tax by claiming its agreements with a manufacturing customer were 'job work' contracts. The Supreme Court held that the agreements were in substance contracts for the supply of contract labour, not job work. The Court found that the agreements: lacked crucial job work specifications (quality standards, delivery schedules, work process details); imposed on the contractor responsibilities for employee wages, statutory compliance, and licensing under labour laws; and were composed of manpower regulation clauses. The piece-rate invoicing did not alter the substance. The Court affirmed the Tribunal's rejection of the exemption claim and upheld the demand for service tax. The appeal was dismissed."
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