The Supreme Court has issued notices to Adani Enterprises’ managing director Rajesh Adani and others after the Customs Department challenged a tribunal order that quashed proceedings against the company.
Key Takeaways
- Supreme Court issues notice to Adani Enterprises MD Rajesh Adani
- Customs Department alleges ₹50 crore duty loss from gold, silver imports
- Adani accused of misusing export promotion scheme for duty-free imports
- Case involves 31,219 kg silver and 25,432 kg gold imports between 2008-2010
“Rajesh Adani, Managing Director of M/s AEL and Samir Vora, Vice-President of M/s AEL, by their acts of omission and commission, indulged in fraudulent and manipulative practice and involved themselves in misdeclaration of export value…” the customs department said.
Customs Department’s Allegations
The Customs Department petition alleges Adani Enterprises engaged in manipulative practices by using duty-free credit entitlement certificates from DGFT, Ahmedabad to import gold and silver without paying customs duties.
Between 2008 and 2010, the company imported approximately:
- 31,219.79 kg of silver
- 25,432.84 kg of gold bars
This resulted in an estimated duty loss of ₹49.77 crore.
Additional Solicitor General N Venkataraman argued before the Supreme Court that the service tax tribunal erred in quashing proceedings against Adani.
Scheme Violation Details
The Incremental Export Promotion Scheme (2003-04) allowed exporters duty credits equivalent to 10% of incremental exports, provided they achieved 25% export growth compared to the previous year.
Adani Enterprises used these Duty-Free Credit Entitlement (DFCE) licenses to import gold and silver duty-free. However, the Customs Department contends these imports violated scheme conditions.
The department argues that Adani’s exports consisted of cut and polished diamonds, which bear no connection to gold and silver bars. Therefore, the company had no legitimate claim to import these precious metals duty-free under the scheme.
The precious metal bars cannot be treated as inputs for diamond exports since the company exported diamonds in their original form, not as jewellery items requiring gold or silver.
