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Informist, Friday, Oct. 10, 2025

 

--SC notice to Adani Ent on customs dept plea vs nixing of show cause notice 

 

NEW DELHI – The Supreme Court on Friday issued notices to Adani Enterprises Ltd., its Managing Director Rajesh Adani and others on customs department's plea challenging an order by the Customs, Excise & Service Tax Appellate Tribunal that had dismissed the department's show cause notice and related proceedings against the company. The customs department had alleged that Adani Enterprises obtained duty-free credit entitlement certificates from the Directorate General of Foreign Trade, Ahmedabad, and used them to import gold and silver without paying duties under the former incremental export promotion scheme.

 

"Issue notice. We will dispose of it at the next date of hearing," said the top court on Friday. 

 

According to the department, Adani Enterprises imported a total of 31,219.79 kilograms of silver and 25,432.84 kg of gold bars without duty payment under duty-free credit entitlement scheme licences. The total duty foregone on these imports was INR 497.77 million for the period between 2008 and 2010. 

 

In 2003-04, the Directorate General of Foreign Trade had introduced a scheme titled "Incremental Export Promotion Scheme", where exporters were entitled to credit of duty to the extent of 10% of the total incremental exports made by them in the year 2003-04, over their exports in 2002-03, provided the incremental growth was at least 25%. The benefit was granted through duty-free credit entitlement scheme licences for duty-free import. A 2003 notification from the Central Board of Indirect Taxes and Customs had exempted goods imported under this scheme from customs duties.

 

According to the directorate's notifications, the goods imported under duty-free credit entitlement scheme must have a link with the products exported. Therefore, for the export of cut and polished diamonds, the input can only be rough, uncut or semi-polished diamonds which after processing can be exported, said the department.

 

The customs department said Adani Enterprises was not eligible for import of gold and silver bars without payment of duty under credit entitlement scheme as the products do not have any link with the exported products--cut and polished diamonds. Gold and silver bars cannot be treated as input and cannot be permitted for imports as replenishment for exports of cut and polished diamonds exported by Adani Enterprises, the department said. Adani Enterprises has imported cut and polished diamonds and exported them in the same form and not in the form of jewellery items, the department said. These exported items cannot be counted towards incremental export benefits provided under duty-free credit entitlement scheme, the department added. 

 

In 2012, the customs department had issued a notice to Adani Enterprises demanding customs duty under Section 28 of the Customs Act, 1962, along with interest. The notice also proposed confiscation of goods and imposition of penalties. In December, the appellate tribunal upheld the adjudicating authority's view to drop proceedings against Adani Enterprises. "...valid DFCE (duty free credit entitlement) licences have been used for import of the goods by the respondents (Adani Enterprises), hence, we do not find any reason for demand of duty or confiscation of the goods, or imposition of penalties," said the appellate tribunal. 

 

At 1236 IST, the shares of Adani Enterprises were marginally up at INR 2,543 on the National Stock Exchange.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Vandana Hingorani 

 

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