Supreme Court Takes Up Customs Department's Plea Against Adani Enterprises in Duty-Free Import Case

The Supreme Court of India has issued notice to Adani Enterprises Ltd., its Managing Director Rajesh Adani, and others, concerning a petition filed by the Customs Department. This petition challenges a ruling by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) that had previously set aside a show cause notice and related proceedings initiated by the department against the company. The core of the dispute dates back to the period between 2008 and 2010. The Customs Department alleges that Adani Enterprises utilized Duty-Free Credit Entitlement (DFCE) certificates under the erstwhile Incremental Export Promotion Scheme to import significant quantities of gold and silver—approximately 25,432.84 kg of gold bars and 31,219.79 kg of silver—without paying customs duty. This alleged non-payment resulted in a duty loss estimated at ₹497.77 million (₹49.77 crore). The department's primary contention is that the imported gold and silver bars were not permissible under the scheme, as the imports must be linked to the exported products. Adani Enterprises' exports were primarily cut and polished diamonds, and the department argued that the bars bore no connection to these exports and could not be treated as inputs or replenishment. In 2012, the Customs Department had initiated proceedings demanding duty and proposing penalties. However, CESTAT later upheld the adjudicating authority's decision to drop the case, ruling that valid DFCE licences were used for the import, thus negating the grounds for duty demand or penalties. The Supreme Court's decision to admit the Customs Department's challenge reopens the legal proceedings concerning this matter. The Court has indicated its intent to dispose of the matter at the next hearing.