The Supreme Court has dismissed the Directorate of Revenue Intelligence’s (DRI’s) petition against two power companies of Adani group and Maharashtra Eastern Grid Power Transmission Company Ltd (MEGPTCL) who were accused of overvaluation in import of capital goods needed to set-up transmission lines and a substation package.

The DRI had challenged the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) order which had overturned its investigation accusing the Adanis of overvaluation of capital goods in a power project.

“We have heard Balbir Singh, Additional Solicitor General appearing for the appellant(s), and Mukul Rohatgi, senior counsel appearing for the respondents, at length. We are of the considered opinion that the matters are concluded by the findings of fact recorded by the authorities below and the impugned order(s) does not require any interference at our behest. The appeals accordingly stand dismissed,” a bench comprising Justices Krishna Murari and Sanjay Karol ordered on Monday.

Overvaluation of imports

The Supreme Court thereby upheld the findings of both the Lower Authorities i.e. Adjudicating Authority as well as Appellate Tribunal (CESTAT) and confirmed that there was no overvaluation in import of capital goods, said Adani counsels.

The Directorate of Revenue Intelligence (DRI) in May 2014 issued show cause notices to Adani Power Maharashtra Ltd (APML), Adani Power Rajasthan Ltd (APRL), Maharashtra Eastern Grid Power Transmission Co. Ltd (MEGPTCL) and others alleging over-valuation in import of capital goods.

Three years later, the Adjudicating Authority of DRI, held that all the imports were genuine and concluded that the value declared is correct and is not required to be re-determined, the Adani’s counsel stated. The SCN were, therefore, dropped.

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), after hearing both sides, dismissed the appeal filed in 2022, which alleged overvaluations by Adanis while importing the power equipment.

The Adani counsels stated that the Apex Court found that the project cost of APML, APRL & MEGPTCL was either similar or lower than the price of peers/competitors. The benchmark price of per megawatt cost was fixed by Central Electricity Regulatory Commission for the EPC contract awarded to lowest bidder following worldwide bidding called International Competitive Bidding.