Adani’s Circular Trading of Gold Jewellery allegations: Supreme Court takes up Matter [Read Judgement]

The Supreme Court of India has taken up the Customs Department’s appeal against the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) order that upheld relief for the appellant in the alleged circular trading of gold jewellery.

The case originated from investigations conducted by the Directorate of Revenue Intelligence (DRI), which alleged that Adani Exports had exported gold jewellery of lower purity with glued stones to artificially inflate export values and claim excess benefits under the Target Plus Scheme.

The department argued that the jewellery exported was remelted in the United Arab Emirates and reimported into India as gold bars, indicating circular trading and misuse of duty-free import benefits under the Advance Licence Scheme.

Read More: GSTN rolls out 3 Day GST Registration

Adani Exports’s counsel argued that the exports were genuine, supported by documents, and verified by customs authorities. The company explained that all exports were made through authorised job workers using imported gold, and that the goods were physically exported under customs supervision.

The counsel also pointed out that the same allegations had been examined earlier in the case of Samir Vora and Adani Enterprises Ltd., where the Tribunal and the Supreme Court had already ruled in favour of the company.

Complete Referencer of GSTR-1, GSTR-1A, GSTR-3B, GSTR-9 & GSTR-9C Click Here

The two-member bench comprising Ramesh Nair (Judicial Member) and Raju (Technical Member) observed that the facts of the present case were identical to those in the earlier Samir Vora judgment. The tribunal found that the department had not produced any evidence showing that the jewellery exported was fake, that money was repatriated, or that the exports were not genuine.

Read More: Supreme Court seeks Centre’s Response on GST, Income TaxRecovery from Offshore Online Gaming/Gambling Companies

The tribunal explained that the Directorate General of Foreign Trade's redemption of the Advance Licences confirmed that Adani Exports had fulfilled its export obligations. It also observed that payments were received through authorised banking channels and that no violation of customs law had been established.

In view of these findings, the Tribunal upheld the Commissioner’s order dropping all proceedings against Adani Exports and dismissed the Revenue’s appeal. Aggrieved by this decision, the Commissioner of Customs, Ahmedabad, has moved the Supreme Court, where notice has been issued and the matter is pending for further hearing.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates