In Brief
The Supreme Court upheld the High Court's decision quashing a service tax show cause notice issued to Sushil & Company, a manpower recruitment agency. The Department alleged that labour supplied by the company for work at Birla Corporation's packing plant constituted taxable Cargo Handling Service. The Court held that Cargo Handling Service requires two conditions: (1) an actual cargo being handled for transportation, and (2) the service provider independently performing packing, unpacking, loading or unloading. Here, the respondent merely supplied workers for general packing plant operations; actual loading and unloading were performed by automatic machines, not by the supplied labour. Therefore, the service did not qualify as Cargo Handling Service and no service tax was due.
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