Between July and August, while granting relief to three Adani group subsidiaries — Adani Power Maharashtra Ltd (APML) and Adani Power Rajasthan Ltd (APRL) and Maharashtra Eastern Grid Power Transmission Company Limited (MEGPTCL), the Mumbai-bench of CESTAT upheld the adjudicating authority’s order in favour of Adani. The DRI has filed a civil appeal before the apex court against the CESTAT order on APML and APRL in November, court filings show.
Meanwhile, sources told ET a similar appeal is likely to be filed against MEGPTCL too. “The department has also sent a proposal to CBIC (the department’s parent) to appeal against the Tribunal’s order before the apex court. A legal view will be taken before moving the SC,” said a government official privy to the development. These sources also pointed out that no fresh evidence can be submitted before the apex court and the appeal is only on points of law and fact.
Other than the entities, the appeal also names three individuals including Vinod Shantilal Shah alias Vinod Shantilal Adani, court documents accessed by ET states. The appeal was filed on November 11 and the apex court heard the matter on December 16.
Email sent to Adani group remained unanswered until press time.
The Hindenburg report that has hit Adani group stock had mentioned the DRI investigation. The total m-cap of the group has declined to Rs10 lakh crore on February 3, 2023, from Rs19.2 lakh crore as of January 24, 2023.
Responding to the alleged involvement of Adani family members in instances of round-tripping of diamond consignments at grossly inflated values to and from India, the group in a press release slamming the report had said, “Certain allegations concerning diamond exports have all been closed by the Customs Excise And Service Tax Appellate Tribunal (CESTAT) in our favour. This decision has been further confirmed by the Supreme Court itself twice over, a fact which has been deliberately ignored and concealed in the Hindenburg report (which contemptuously raises questions on the competence of the appellate tribunal with baseless claims that it has ignored evidence),” the group said.In July 2021 – after minister of state for finance Pankaj Chaudhary said the DRI is investigating certain entities belonging to the Adani Group – the conglomerate approached the CESTAT seeking early hearing on the matter, saying it had been getting enquiries from independent directors, auditors, financial institutions and lenders about the status of the case.
In July 2022, the tribunal in its order observed that the department’s case pertaining to alleged over-valuation is based on certain documents received from the foreign branches of the Indian banks which were not certified as per the conditions prescribed under Section 138 C (4) of the Customs Act.
The tribunal also observed that the investigation carried out by the DRI was ‘incomplete’. The tribunal opined that while the department submitted the documents received from the Indian banks, it failed to make the foreign banks join the probe. “…since the department could not interrogate or make Standard Chartered Bank join the investigation cannot be a reason to ignore the possibility of it acting as an active banker on behalf of EIF (the offshore entity) for the purpose of remitting the amount of original equipment manufacturer,” said the tribunal order. “The burden was on the department to prove why the total remittance amount was only through these two banks and no other bank. It, therefore, follows that the investigations carried out by the revenue was incomplete,” the order said.
On March 15, 2014, the DRI sent a common show cause notice alleging that EIF, an entity based in Dubai, Adani Power Maharashtra Ltd (APML) and Adani Power Rajasthan Ltd (APRL) were related entities for the reason that EIF was owned and controlled by Vinod Adani through EIH – the holding company of EIF – and that he was also a shareholder in Adani Enterprises Ltd, which in turn owned and controlled APML and APRL through its subsidiary Adani Power Limited.
