The Supreme Court of India has issued notices to Adani Enterprises Ltd, its managing director Rajesh Adani, and others in response to a petition filed by the Customs Department. The petition challenges a decision made by the Customs, Excise & Services tax Appellate Tribunal (CESTAT), which had previously set aside a show cause notice and related proceedings initiated by the department against Adani Enterprises. The Supreme Court has agreed to hear the case and will dispose of it at the next date of hearing.
The Customs Department alleges that Adani Enterprises obtained duty-free credit entitlement certificates from the Directorate General of Foreign Trade (DGFT) and used them to import gold and silver without paying customs duties under the Incremental Export Promotion Scheme. Between 2008 and 2010, the company allegedly imported 31,219.79 kg of silver and 25,432.84 kg of gold bars without paying customs duty, resulting in a duty loss of approximately ₹497.77 million.
The Incremental Export Promotion Scheme, introduced in 2003-04, allowed exporters to earn duty credits worth 10% of their incremental exports over the previous year, provided they achieved at least 25% growth. These credits could be used to import goods duty-free through Duty-Free Credit Entitlement (DFCE) licenses, with the condition that imports must be linked to exported products.
The Customs Department argues that Adani Enterprises was not entitled to import gold and silver bars as they bore no connection with its export products, which are cut and polished diamonds. The department claims that such bars could not be treated as inputs or replenishment for diamond exports, as the company exported diamonds in the same form and not as jewelry items.
In 2012, the Customs Department had issued a notice demanding duty and proposing confiscation and penalties under Section 29 of the Customs Act, 1962. However, the CESTAT later upheld the adjudicating authority’s view to drop the case, stating that valid DFCE licenses had been used for the import of goods by Adani Enterprises. The Supreme Court’s decision to hear the case has reopened the matter, and the court will now consider the allegations made by the Customs Department against Adani Enterprises.