How do i invoke sc create from a powershell script

The issue here is not with the sc executable. As the error states, sc resolves to Set-Content. If you issue Get-Alias -Name sc, you'll see:

To bypass the alias, use the full name of the executable (including the file extension):

PS C:\> sc.exe query wuauserv

SERVICE_NAME: wuauserv
        TYPE               : 20  WIN32_SHARE_PROCESS
        STATE              : 4  RUNNING
                                (STOPPABLE, NOT_PAUSABLE, ACCEPTS_PRESHUTDOWN)
        WIN32_EXIT_CODE    : 0  (0x0)
        SERVICE_EXIT_CODE  : 0  (0x0)
        CHECKPOINT         : 0x0
        WAIT_HINT          : 0x0

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You might want to use the -f operator when constructing your command line arguments, to avoid those annoying quote-escaping back ticks all over the place:

$CmdLine = 'sc.exe create "{0}" binpath= "{1}" displayname= "{2}" ' -f $ServiceName,$TargetPath,$DisplayName
Execute-Command -Command $CmdLine