Commissioner of Customs Vs Adani Enterprises Ltd. (Supreme Court of India)
SC Upholds import of gold and silver bars under Duty-Free Imports under DFCE Scheme was valid, rejecting alleged Circular Trading and fraudulent entitlement
The Supreme Court of India upheld the validity of duty-free imports of gold and silver bars made under Duty-Free Credit Entitlement (DFCE) licences, affirming that the benefits could not be denied on allegations of circular trading or fraudulent entitlement in the absence of concrete evidence. The Court endorsed the findings of the appellate tribunal that substantial processing activities were carried out on exported cut and polished diamonds, resulting in value addition, and that declared FOB values had been duly verified and accepted by Customs authorities. It found no proof of overvaluation, manipulation, or reuse of identical goods to claim export incentives, and rejected the allegation of circular trading. Significantly, the Court held that since the licensing authority had neither cancelled nor revoked the DFCE licences, Customs authorities lacked jurisdiction to question their validity or deny benefits. Consequently, duty demands, confiscation, and penalties imposed mechanically without specific findings were set aside, reinforcing limits on Customs’ powers vis-à-vis export incentive licences.
Read Relevant CESTAT Judgment: CESTAT rejected duty demands as no evidence of circular trading or overvaluation found
