CESTAT Mumbai Dismisses Customs Appeals Against Adani Group: Tribunal Upholds Legitimacy of EPC Imports and Declared Valuation

Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 06.06.2026

CESTAT Mumbai Dismisses Customs Appeals Against Adani Group: Tribunal Upholds Legitimacy of EPC Imports and Declared Valuation

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Mumbai recently delivered a significant order involving Adani Enterprises Limited and several other Adani Group companies. This article provides a detailed overview of the case, the legal proceedings, and the implications of the Tribunal’s decision.

Background of the Case

The case originated from a Directorate of Revenue Intelligence (DRI) investigation into imports made by various Adani Group entities. The investigation led to three separate show cause notices (SCNs) alleging over-valuation of imported goods supplied by Electrogen Infra FZE (EIF), UAE. The notices targeted different Adani companies across multiple projects, including solar power and port infrastructure.

Key Entities Involved

• Adani Enterprises Limited (AEL)
• Adani Renewable Energy LLP (AREL)
• Adani Hazira Port Private Limited (AHPPL)
• Adani Port and Special Economic Zone Limited (APSEZL)
• Adani International Container Terminal (P) Limited (AICTPL)
• Adani Vizag Coal Terminal Private Limited (AVCTPL)

Timeline of Proceedings

1. 2014: Two initial SCNs were issued to Adani Power Maharashtra Ltd., Adani Power Rajasthan Ltd., and Maharashtra Eastern Grid Power Transmission Company Ltd., alleging over-valuation.
2. 2016: A third SCN was issued to the six Adani entities listed above, based on the same investigation and evidence.
3. 2017: The Additional Director General (DRI) dropped proceedings for the first two SCNs, finding no merit in the over-valuation allegations.
4. 2022: The Tribunal upheld the dropping of proceedings in both cases. The department’s appeals to the Supreme Court were dismissed in 2023, making the findings final.
5. 2023-2026: The third SCN was adjudicated by the Principal Commissioner, who also dropped the proceedings. The department appealed this decision, leading to the current CESTAT order.

Facts of the Appeals

Each Adani entity had followed transparent international competitive bidding processes for their respective projects, awarding contracts to EIF as the lowest bidder. The contracts were comprehensive EPC (Engineering, Procurement, and Construction) agreements, including:

• Supply of specialized equipment (solar modules, cranes, tugs)
• Extended warranties and performance guarantees
• On-site training and risk coverage

The imports were executed under multiple Bills of Entry, and all assessments were finalized between 2011 and 2013.

Legal Issues Examined

The Tribunal considered three main issues:

1. Whether the declared value of imports should be rejected and re-determined under customs valuation rules.
2. Whether the goods were liable to confiscation under Section 111(m) of the Customs Act.
3. Whether penalties should be imposed on the importers and related parties.

Key Findings

• No Influence on Pricing: Although the importers and EIF were related, the Tribunal found that the relationship did not influence the transaction prices. The contracts were awarded through transparent bidding, and the declared values were consistent with market rates.
• Evidentiary Value: The evidence relied upon by the DRI (such as overseas bankers’ letters) lacked proper certification under Section 138C(4) of the Customs Act, rendering them inadmissible.
• Consistency with Previous Decisions: Since the facts and evidence were identical to the earlier cases (which had attained finality up to the Supreme Court), the Tribunal held that the same outcome must apply.
• No Grounds for Confiscation or Penalty: As there was no mis-declaration or over-valuation, the goods could not be confiscated, and no penalties could be imposed.

Implications of the Decision

The CESTAT Mumbai’s order reinforces several important legal principles:

1. Finality of Judicial Decisions: Once findings of fact are upheld through all appellate forums, including the Supreme Court, similar cases based on the same facts and evidence must follow suit.
2. Transparency in Procurement: The use of international competitive bidding and comprehensive EPC contracts was crucial in establishing the legitimacy of the declared values.
3. Strict Evidentiary Standards: Authorities must ensure that evidence meets statutory requirements to be admissible in customs proceedings.

Conclusion

The dismissal of the department’s appeals by CESTAT Mumbai marks a decisive end to a long-standing dispute involving Adani Group companies. The order upholds the importance of transparent business practices and the rule of law in customs adjudication, setting a precedent for future cases involving similar allegations.

Source: CESTAT Mumbai

Disclaimer

Handy Download:

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com