Power transmission exemption covers ancillary facilitation services that are integral to achieving electricity transmission.

Services integrally connected with transmission of power and rendered to achieve electricity transmission fall within the wide sweep of the exemption phrase "in relation to" transmission of power, so ancillary facilitation services cannot be taxed separately as erection, commissioning and installation service. The Tribunal relied on coordinate-bench rulings and the Gujarat HC's interpretation that the phrase has wide amplitude and covers related activities until the transmission objective is achieved. It also noted that the Revenue circular was inconsistent with the statutory scheme. On that basis, the demand was held unsustainable and the assessee's appeal succeeded.

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Issues: Whether the fees charged by the service provider for facilitating high-voltage transmission connection and related services were taxable as erection, commissioning and installation service or were covered by the exemption linked to transmission of power.

Analysis: The Tribunal followed its earlier coordinate-bench decisions and the Gujarat High Court ruling holding that the expression "in relation to" transmission of power is of wide amplitude and covers ancillary activities undertaken till the object of transmission and distribution of electricity is achieved. It also noted that the circular relied upon by the Revenue had been struck down as inconsistent with the statutory scheme, while the earlier circular treated services connected with transmission as falling within the exempted ambit. The issue was treated as no longer res integra.

Conclusion: The impugned demand was not sustainable and the appeal succeeded in favour of the assessee.

Ratio Decidendi: Services that are integrally connected with transmission of power and rendered toward achieving the object of electricity transmission fall within the wide sweep of the exemption expression "in relation to" and cannot be taxed as a separate service merely because they are ancillary to the main transmission activity.

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