ADANI ENTERPRISES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) A pivotal but significant issue which arise in the present Writ Petition is whether the Respondent - Directorate of Revenue Intelligence has legally and validly commenced the investigation against the petitioner into alleged commission of offence punishable under Section 135 of the Customs Act, 1962 and whether or not, based on the said investigation set into motion, it is entitled to take recourse to the provisions of Section 166-A of the Code of Criminal Procedure, 1973 for issuance of the Letter of Rogatory by the Magistrate.

(2.) The petitioner is alleged to be involved in the over valuation of coal of Indonesian origin and it is alleged that during the period from 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. It is noted that both the said companies are 100% subsidiaries of a Mauritius Based Company i.e. Adani Global Limited (AGL) which is an 100% owned subsidiary of Adani Enterprises Limited i.e. petitioner no.1 before us. It is alleged that the petitioner acting in connivance with the individuals and companies grossly overstated the import value of coal as compared to the actual export value ex-Indonesia and prevalent international prices and it is alleged that with an object of siphoning of the money abroad and to avail higher power tariff compensation, this course was adopted so that it can sold the power to the power utility public sector undertakings in India. The precise accusation allege that the comparative analysis of value of Indonesian coal declared to Indian customs by the Adani Group of Companies 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. The petitioner is also charged with availing the benefit of nil duty or concessional rate of duty on these imports in terms of the ASEAN- India Free Trade Agreement. 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.

(3.) In the background of the aforesaid allegations, requisition under Section 108 of the Customs Act, 1962 were issued to the petitioner to submit documents/information relating to purchase and sell of Indonesian coal by their subsidiary companies in Singapore and Dubai. It was responded to by the petitioner stating that the AGPTE & AGFZE are independent legal entities incorporated abroad and DRI may directly communicate with them, if at all it desired to do so. On requisitions being issued to AEL to submit the documents since both AGPTE and AGFZE were the step down subsidiaries of AEL, there was no response. This alleged non co-operation of the Adani Group of Companies as well as their banks in submitting the transaction relating documents/information compelled the DRI to prefer application before the Addl. Chief Metropolitan Magistrate, 8th Court 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. The Addl. Chief Metropolitan Magistrate obliged the authorities after examining the applications made by the DRI and the case records and issued four letters of Rogatory under the Mutual Legal Assistance Treaty (MLAT) on different dates. The Letter of Rogatory to Singapore was issued on 2/8/2016 and forwarded to the competent authority in Singapore. It is this course of action which is oppugned in the petition instituted by it.