In Brief
The respondent, a registered manpower recruitment agency, supplied labour to a cement manufacturing company for work at its packing plant. The tax department alleged these services constituted taxable 'Cargo Handling Service' under the Finance Act, 1994. The High Court quashed the show cause notice, finding the services were merely labour supply. The Supreme Court upheld this decision, holding that cargo handling service requires two conditions: presence of cargo in transit and the service provider's independent involvement in loading/unloading/packing/unpacking. Here, workers only did general packing plant work; actual loading was by machines, with no transportation involved. Therefore, the services did not constitute cargo handling service and no service tax was due.
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