SC Stays Bombay HC Judgement Quashing LRs Issued By DRI For Probe Into Alleged Invasion Of Customs Duty By Adani Group
The Supreme Court on Wednesday stayed a judgment of the Bombay High Court quashing Letters Rogatory issued by the Directorate of Revenue Intelligence (DRI) to authorities in Singapore, UAE, Hongkong and British Virgin Islands seeking information about the purchase and sale of Indonesian coal by subsidiary by Adani Enterprises Ltd. and Adani Power Ltd, companies of Adani group.Three judge bench...
The Supreme Court on Wednesday stayed a judgment of the Bombay High Court quashing Letters Rogatory issued by the Directorate of Revenue Intelligence (DRI) to authorities in Singapore, UAE, Hongkong and British Virgin Islands seeking information about the purchase and sale of Indonesian coal by subsidiary by Adani Enterprises Ltd. and Adani Power Ltd, companies of Adani group.
Three judge bench of Chief Justice of India SA Bobde, Justice BR Gavai and Justice Surya Kant heard the special leave petition filed by DRI against Bombay HC's decision and issued notice to the respondent companies of the Adani group.
Advocate Tushar Mehta, Solicitor General of India appeared for the DRI and argued that the probe into alleged overvaluation of Indonesian coal imports should be allowed to continue.
In October 2019, Justices Ranjit More and Bharati Dangre had quashed the Letters rogatory and observed-
"The DRI has commenced the investigation into a non-cognizable offence without obtaining the necessary permission from the Magistrate and in such circumstances, the LR issued by the Magistrate do not meet the test and is not compliant of Chapter XII of the Cr.P.C. since it do not precede the mandatory requirement of initiation of investigation, as prescribed in Chapter XII."
Non- cooperation of the Adani Group of Companies as well as their banks in submitting the transaction-related documents/information led to the DRI filing an application before the Addl. Chief Metropolitan Magistrate, Mumbai with a request to issue Letter of Rogatory to the authorities at Singapore, UAE, Hongkong, British Virgin Irelands in order to secure the necessary information.
According to the DRI, petitioners were involved in the overvaluation of coal of Indonesian origin and it is alleged that during the period between October 2010 to March 2016, Adani Group of Companies had imported about 1300 consignments of Indonesian Coal and majority of the import came to be routed through their group subsidiary company i.e. Adani Global Private Limited (AGPTE), Singapore and Adani Global (AGFZE), Dubai.
Allegedly the petitioners acted in connivance with certain individuals and companies in grossly overstating the import value of coal as compared to the actual export value and with an object of siphoning of the money abroad apart from availing a higher power tariff compensation, this course was adopted so that they can sell power to the power utility public sector undertakings in India.
The precise accusation against the two Adani group companies is that the difference between value of Indonesian coal declared to Indian customs by them as against the values declared by the Indonesian exporters to the Indonesian authorities at the time of export was to the tune of Rs.930 crore and this over valuation was noticed in 231 consignments
According to the DRI, the petitioner was importing coal from Indonesia through its subsidiary companies and availing the benefits of the concessional rates of duty under the AIFTA on one hand and on the other hand, the petitioner was engaged in grossly overstating the value of the imported coal and this was apparent from the mismatch in the values.