Mumbai:The Customs department has imposed a collective penalty of Rs 38.5 crore on Ahmedabad-based Adani Exports Limited (AEL) and its related entities in a case of Rs 679.62 crore duty evasion involving import and export of diamonds. Of the penalty, Rs 1 crore has been imposed on AEL’s managing director Rajesh Adani.
The Customs’ decision has come six years after the Directorate of Revenue Intelligence (DRI) issued a show-cause, accusing the company of importing diamonds and exporting the same, falsely claiming value addition. AEL thus inflated the export turnover to claim government incentives in the form of duty-free imports, DRI had alleged. Customs commissioner P M Saleem, in the January 14 order, endorsed the findings and said, “The value addition claimed is bogus.”
Vikram Nankani of Economic Laws Practice, who represented the company, said they have gone in appeal in the Customs, Central Excise and Service Tax Appellate Tribunal. “The matter is sub judice and I would not like to comment,” he told TOI over the phone on Friday. AEL had denied the allegations during the hearing of the show-cause notice and said the value addition was genuine.
In 2004, the government launched a scheme, Target Plus, that permitted duty-free imports for companies which fulfilled certain export performance conditions. The scheme was for five years, but diamonds were removed from the list of items in 2006, following misuse complaints. While the scheme was in force, AEL acquired interest in two companies and accordingly, the export figures rose. When the policy changed, enhancing the value addition from 5% to 10%, AEL’s corresponding figures also rose, thus inflating exports, the order said. The exports dropped to one-third in January 2006 because the companies had achieved the targets for the same by then.
The order said the companies in Hong Kong and Singapore that either supplied the diamonds or bought the value--added diamonds were controlled by AEL. These firms were shut the moment the incentive scheme was discontinued. AEL also paid illegal commission to overseas entities for exports, which if taken into account reduces the value addition claimed by the company. AEL is the main culprit, the order said.
The order said that AEL entered into MoUs with group companies, who passed on incentives claimed for exports to AEL for a commission.
Courtsy:
C Unnikrishnan TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/04/08&PageLabel=9&EntityId=Ar00902&ViewMode=HTML
The Customs’ decision has come six years after the Directorate of Revenue Intelligence (DRI) issued a show-cause, accusing the company of importing diamonds and exporting the same, falsely claiming value addition. AEL thus inflated the export turnover to claim government incentives in the form of duty-free imports, DRI had alleged. Customs commissioner P M Saleem, in the January 14 order, endorsed the findings and said, “The value addition claimed is bogus.”
Vikram Nankani of Economic Laws Practice, who represented the company, said they have gone in appeal in the Customs, Central Excise and Service Tax Appellate Tribunal. “The matter is sub judice and I would not like to comment,” he told TOI over the phone on Friday. AEL had denied the allegations during the hearing of the show-cause notice and said the value addition was genuine.
In 2004, the government launched a scheme, Target Plus, that permitted duty-free imports for companies which fulfilled certain export performance conditions. The scheme was for five years, but diamonds were removed from the list of items in 2006, following misuse complaints. While the scheme was in force, AEL acquired interest in two companies and accordingly, the export figures rose. When the policy changed, enhancing the value addition from 5% to 10%, AEL’s corresponding figures also rose, thus inflating exports, the order said. The exports dropped to one-third in January 2006 because the companies had achieved the targets for the same by then.
The order said the companies in Hong Kong and Singapore that either supplied the diamonds or bought the value--added diamonds were controlled by AEL. These firms were shut the moment the incentive scheme was discontinued. AEL also paid illegal commission to overseas entities for exports, which if taken into account reduces the value addition claimed by the company. AEL is the main culprit, the order said.
The order said that AEL entered into MoUs with group companies, who passed on incentives claimed for exports to AEL for a commission.
Courtsy:
C Unnikrishnan TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/04/08&PageLabel=9&EntityId=Ar00902&ViewMode=HTML
