Aditya Enterprises v. Commr. of Cus. & CE

FINANCE ACT, 1994

--Manpower recruitment and supply agency service--LaviabilityDischarging dues of ESI and PF by principal--Contractor whether imply supply of labourers being made by assessee--Where principal-contractor had discharged their obligation under the provisions of ESI Act and EPF Act, it did not lead to the inevitable conclusion that assessee had supplied labourers and had entered into colourable contracts to avoid the liability of service tax.--Assessee had entered into an agreement for execution of various works for the principal. Case of assessee was that the payment for such work was based on the volume of the work executed, and not according to the number of workmen deployed by assessee, therefore, demand of service tax under manpower supply agency services could not be raised, prior to 31-3-2010. Held: The principal-contractor had discharged their obligation under the provisions of ESI Act and EPF Act. The same did not lead to the inevitable conclusion that assessee has supplied labourers and had entered into colourable contracts to avoid the liability of service tax. Therefore, the show cause notice was not maintainable as the same was based on the presumption, having no sanctity of law.