Electricity transmission exemption covers cable and transformer installation where the work has a direct nexus to transmission and distribution.

Laying electric cables, LT lines, transformers and allied electrical equipment was treated as work undertaken towards transmission of electricity, because services with a direct and proximate nexus to transmission or distribution fall within the exemption notifications. The Tribunal applied its earlier view on electricity-related works and held that the appellant's activities were covered by the exemption, so they were not taxable as erection, commissioning and installation service.

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Issues: Whether the appellant's activities of laying electric cables and LT lines, and installing transformers and allied electrical equipment, were covered by the exemption for services relating to transmission of electricity and therefore not liable to service tax.

Analysis: The work executed by the appellant was found to be activities undertaken towards transmission of electricity. The exemption notifications applicable to services relating to transmission and distribution of electricity were held to cover such work, and the Tribunal followed its earlier decision holding that activities having a direct and proximal nexus with distribution or transmission of electricity fall within the exemption. On that basis, the appellant's services were treated as exempt and not taxable under erection, commissioning and installation service.

Conclusion: The appellant was entitled to the exemption benefit and was not liable to service tax on the work in question.

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