The SC dismissed the customs department’s appeal against the Adani Group after hearing detailed arguments from both parties on the matter.
Published Date – Tue, 3/28/23 at 03:31pm
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New Delhi: The Supreme Court dismissed an appeal by the customs department against Adani Power Maharashtra Ltd. (APML), Adani Power Rajasthan Ltd. (APRL) and others over overvaluation of imported goods.
After hearing detailed arguments on the matter from both sides, the bench of Justices Krishna Murari and Justice Sanjay Karol dismissed the Customs decision against APML, APRL and appeals by other companies.
According to lawyers familiar with the development, the Supreme Court found that APML and APRL’s project costs were similar or lower than those of their peers/competitors.
The lawyer added that the price was below the cost-per-megawatt benchmark set by the Central Electricity Regulatory Commission (CERC) for an EPC contract awarded to the lowest bidder following a global tender known as the International Competitive Bidding (ICB).
According to the lawyer, the Supreme Court upheld the findings of the lower authorities, namely the trial authority and the appeals court, and confirmed that imported capital goods were not overvalued. The Supreme Court rejected Customs’ appeal on Monday.
APML and APRL after ICB, imports needed to set up thermal power projects in Maharashtra and Rajasthan.
Likewise, a consortium led by PMC Projects (India) pvt. Ltd., after ICB, was awarded the contract to import transmission lines and substation packages for Maharashtra Eastern Grid Transmission Company Limited (MEGPTCL).
In May 2014, the Directorate of Tax Intelligence (DRI) issued a Show Cause Notice (SCN) to APML, APRL, MEGPTCL and others alleging overvaluation of capital goods imports.
The adjudicating body of the 2017 DRI, the same body that issued the SCN, considered all imports genuine after detailed processing and concluded that the declared value was correct and did not require re-assignment. Later, the SCN was deleted.
In 2022, the Court of Appeal dismissed the Customs Department’s defense, confirming that Adani had not overvalued when importing the equipment.
