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of <h1>Fees for high-voltage transmission connectivity support services held exempt 'in relation to' electricity transmission; tax demand set aside.</h1> Fees collected for activities incidental to providing high-voltage transmission connectivity were disputed as taxable under 'Erection, Commissioning and ... Classification of services - Erection Commissioning and Installation Service or not - certain fees charged for services to be rendered to the prospective consumer who want high voltage transmission connection etc. - Revenue places reliance on the Circular of C.B.E & C. Circular No.34/8/2018-GST dated 01.03.2018 - HELD THAT:- The Hon’ble Gujarat High Court has struck down the circular referred by the Learned AR as not being in accordance with the statutory provisions and that the term “in relation to” exemption which extend to transmission of power is wide enough to cover any other activity including providing of fees for any services provided till the time and till its purpose, is to provide electricity transmission and distribution services to the consumer. We find that the circular though of the GST era was considered by Hon’ble High Court of Gujarat. Though before the Hon’ble Gujarat High court in the matter of Torrent Power Ltd. [2019 (1) TMI 1092 - GUJARAT HIGH COURT], the matters pertained to time period before and after introduction of GST. For both periods, the matter was decided in favour of the party as CBEC circular which was post GST era was struck down and the earlier Circular No. 131/13/2010-ST dated 07.12.2010 was found to be in favour of assessee, since, it stated that “in relation to” transmission services will include any other service in its ambit till main objective is to provide transmission service. The issue is no more res integra and has been decided in favour of the party at various forums and by different constitutions of this Tribunal also - appeal allowed. Issues: Whether the fees charged by the appellant for providing high-voltage transmission connection and related services fall within the exemption 'in relation to' transmission of power and hence are not taxable.Analysis: The matter was considered in light of prior decisions of this Bench and the Gujarat High Court which have interpreted the phrase 'in relation to' in the context of transmission of power broadly to include ancillary services whose purpose is to provide transmission and distribution of electricity. The Circular of the Central Board of Excise & Customs (No.34/8/2018-GST) was held by the Gujarat High Court to be not in accordance with statutory provisions, and earlier Circular No.131/13/2010-ST was found to support the wider construction that services ancillary to transmission fall within the exemption. The appellants relied on these authorities and related Tribunal orders which apply to the present facts, and the Tribunal found those decisions applicable to the fee charged for obtaining high-voltage transmission connection.Conclusion: The fee for providing high-voltage transmission connection and related services is covered by the exemption 'in relation to' transmission of power and therefore the appeal is allowed in favour of the assessee.
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