D I R E C T O R A T E O F R E V E N U E I N T E L … 3 of 97 2003 and the Maharashtra Electricity...

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D I R E C T O R A T E O F R E V E N U E I N T E L L I G E N C E 13, SIR VITHALDAS THAKERSEY MARG, OPP PATKAR HALL, NEW MARINE LINES,

MUMBAI 400 020 PH: 022-22010115, 022-22010116

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F.No.DRI/MZU/CI-224 (PMC)/2013 Date: 15-05-2014

Subject: Gross over-valuation in the import of goods by M/s Maharashtra

Eastern Grid Power Transmission Company Limited (MEGPTCL), a

wholly owned subsidiary of M/s ADANI Enterprises Limited (AEL)

through the contractor M/s PMC Projects (India) Private Limited -

Show Cause Notice under Section 124 of the Customs Act, 1962 –

reg.

1.1 Intelligence developed by Mumbai Zonal Unit (MZU) of Directorate of

Revenue Intelligence (DRI) indicated that various entities of Adani group were

indulging in gross over-valuation of imported goods (zero or low duty rated) to siphon

off money abroad from public listed companies. The modus-operandi followed was

that for power sector imports (Power generation:- Zero % duty and Power

transmission:- 5% Basic Custom Duty), while the goods from various vendors (mostly

South Korean & Chinese) are sent directly to India, the documents are routed through

an intermediary entity created by them in the UAE, viz. M/s. Electrogen Infra FZE,

who raised inflated invoices (inflating the values in original invoices of OEMseveral

times) on the Indian company, against which money is remitted to UAE. The activities

of M/s Electrogen Infra FZE, UAE are apparently controlled and managed by the

Adani Group through one or more of its representative firms and/or personnel.

Intelligence further suggested that from UAE, while the actual invoice value is remitted

to respective OEMs, the extra amount is routed to the Mauritius account of the parent

company of M/s Electrogen Infra FZE i.e. M/s Electrogen Infra Holding Pvt. Ltd.

1.2 On the basis of the said intelligence, enquiries were initiated into the

import of goods invoiced by M/s Electrogen Infra FZE, UAE (here-in-after referred to

as ‘EIF’ also),which were found to have been imported and cleared in the name of M/s

PMC Projects (India) Private Limited, (IEC No. 0805004416)(here-in-after referred to as

‘PMC’ also), having its registeredoffice in Ahmedabad.

1.3 Information and documents were sought from PMCvideletter dated 05-

02-2013 bearing F.No.DRI/MZU/CI-224/2013/997(RUD-C/1). The company, vide its

letter Ref.No. PMC/DRI/Reply/1394/13 dated 26.02.2013, (RUD-D/1) sought extra-

time of 15 days upto 15.03.2013, on the plea of being unable to compile the

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requisitioned information within the given time frame. Subsequently, on or about

13/14-03-2013, the company through a representative from its Mumbai office, sought

to submit certain documents in two box files, which on preliminary scrutiny turned

out to be incomplete and did not contain all the requisitioneddocuments. The said

documents were returned back forthwith to the representative, since they were not

only found to be incomplete but submission of crucial documents also appeared to

have been withheld. This aspect was categorically pointed out to the concerned

person, Shri AjitBarodia, Associate VP of the Adani Group who had been been deputed

to this Unit with the documents to co-ordinate the company’s response, as well as

verbally to one Shri Vidyut Joshi, an employee of PMCbased at Ahmedabad. Despite

the documents having been returned back to the importer’s representative with

specific instructions, PMCproceeded to forward the same incomplete documents in two

box files by post. These facts were brought to the notice of the Vice-President of the

Adani Group, handling corporate affairs, who had liaised with this Unit on behalf of

PMC, through a letter dated 26-03-2013 (RUD-C/2) bearing F.No. DRI/MZU/CI-

224/2013/1869, drawing his attention to delay in furnishing of the requisitioned

information&documents

1.4 A specific request was made in the letter 26-03-2013, for immediate

submission of the all Contracts/Agreements entered into by EIF with one or more

overseas firms/entities in connection with sourcing of equipments/machinery for

eventual supply to PMC. Specific mention was made in the letter for submission of a

copy of the Contract No. bearing reference no. 700003, purported to be the contract

number for the Contract executed between EIF and M/s Hyundai Heavy Industries Co.

Ltd. , South Korea, involving supply of high voltage transformers, shunt reactors etc.,

mention of which was found in some of the documents forwarded by the importer in

the two box files.

2.1 The information and documents forwarded by PMC under cover of letter

bearing Ref : PMC/765/DRI/REPLY/1401/13 dated 12-03-2013 (RUD-D/2), were

examined. From the submissions made by the importer in the said letter, it appeared

that M/s Maharashtra Eastern Grid Power Transmission Company Limited, having its

registered office at Adani House, Mithakhali Six Roads, Navrangpura, Ahmebadad-

380009 (here-in-after referred to as ‘MEGPTCL’ also), a wholly owned subsidiary of

M/s Adani Enterprises Limited, (here-in-after referred to as ‘AEL’ also), the flagship

company of the Adani Group, under Licence from the Maharashtra Electricity

Regulatory Commission, Mumbai (here-in-after referred to as ‘MERC’ also), a

electricity regulatory body of government of Maharashtra, was setting up a 765 KV

intra-state transmission network in eastern part of the State of Maharashtra, to

evacuate power from the upcoming five power plants. The project apparently involved

setting up of two765 KV S/C transmission lines in the corridor of Tiroda– Koradi III –

Akola II – Aurangabad, alongwithassociated sub-stations and bays. It further appeared

that based on an application dated 18-02-2010, made by MEGPTCL to the MERC

requesting for grant of transmission licence under section 14 of the Electricity Act,

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2003 and the Maharashtra Electricity Regulatory Commission (Transmission Licence

Conditions) Regulations, 2004 for development of transmission system as above, for

evacuation of power from projects in north-eastern Maharashtra, the MERC vide its

order dated 14-09-2010 appears to have granted a Transmission Licence i.e

Transmission Licence No. 1 of 2010 (RUD-D/3)for a period of 25 years to MEGPTCL.

2.2 The Commission in its order dated 14-09-2010 observed that capital cost

of the transmission project should be optimized and grant of licence should not in any

manner be construed as approval of the cost and other details of the project by the

Commission. The Commission accordingly,inter-alia, imposed certain conditions,

which were to be construed as specific conditions for the Transmission Licence. The

first and foremost condition, as per the MERC’s order, was that the construction and

commissioning of the transmission system shall be executed through suitable

packages and contracts for these packages shall be awarded through Competitive

Bidding basis. The said order further contained directions that the aforesaid Specific

Conditions of the Transmission Licence of MEGPTCL are specified by regulations

under Section 16 of the Electricity Act, 2003 and that such conditions shall be deemed

to be conditions of Licence of MEGPTCL. These conditions appear to have been

expressly incorporated in the Transmission Licence No. 1 of 2010 dated 21-09-2010

granted to MEGPTCL.

2.3 Perusal of copy of the Purchase Order bearing Ref.

MEGPTCL/PMC/AD/03/10 dated 27-09-2010 (RUD-D/4)placed by MEGPTCL on

PMC revealed that it covered design, engineering, manufacture, procurement,

assembly and testing at works, packing & forwarding, supply, inland transportation

and transit insurance for items/materials for 765 KV & 400 KV sub-stations including

allequipments , auto transformers and shunt reactors associated with 765 KV Tiroda-

Koradi III-Akola III-Aurangabad Transmission System in Maharashtra. Relevant

extracts of the purchase order under the heading References is reproduced below :-

‘”References:

1. Tender Notice No. MEGPTCL/765 KV & 400 KV SS/EPC/02 issued vide letter ref.

no. MEGPTCL/Trans.Line/Tender-EPC/KP/36/10 dated 17-08-2010.

2. Pre-bid Meeting dated 21-08-2010

3. Your Techno-Commercial Bid Ref.PMC/MEGPTCL/Tender/696/10 dated 04-09-

2010

4. Letter of Intent Ref.AD/MEGPTCL/SS/01 dated 23-09-2010”

Contents of the Purchase Order, as reproduced above, appeared to indicate that

Purchase Order was placed pursuant to a tendering process in selection of PMC as the

contractor for execution of works. From the contents of the Purchase Order, it further

appeared that though the Purchase Order had been addressed to PMC, express

mention appears to have been made regarding the Purchase Order being placed on a

consortium which included M/s PMC Projects (India) Private Limited. However, the

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names of other members of the consortium were not forthcoming in the Purchase

Order. The Purchase Order value given at Clause 2.0 under Contract Price stood at Rs.

1440,65,10,525/- The price appeared to have been revised subsequently to Rs.

1693,94,04,176/- vide Purchase Order Amendment-1 bearing Ref. No.

MEGPTCL/PMC/AD/03/10/AMDT-1 dated 05-07-2011 (RUD-D/ 5 ).

2.4 On scrutiny of the documents, it further appearedthat PMC, for the

purpose of executing the order placed on by M/s MEGPTCL, on their part, in turn

appeared to have sub-contracted orders on two different entities viz. M/s ABB Limited,

Bangalore and EIF. A portion of the order placed on PMC by M/s MEGPTCL, was sub-

contracted to M/s ABB Limited, Bangalore by PMC by way of entering into a contract

dated 28-09-2010(RUD-D/6) with them,for sourcing of Surge Arresters & Isolators for

various sub-stations. The scope of supplies included both off-shore and onshore

supplies for an aggregate consideration of Rs. 189,40,37,306/- , price of the off-shore

and on-shore supply components being Rs. 20,76,16,131/- &Rs. 166,27,13,450/-

,respectively,and the balance of Rs. 2,37,07,726/-, being freight and transit insurance

for onshore and offshore supplies. The remaining portion of the work ordered on PMC

by MEGTPCL under Purchase Order dated 27-09-2010 appears to have beensub-

contracted by PMC to EIF, by way of entering into and executing an agreement bearing

no. 415703 on 01-10-2010 (RUD-D/7)with them for an aggregate consideration of

USD 376,195,652/- for sourcing Auto Transformers, Shunt Reactors, Disc

Insulatorsand OpticalFiber Ground Wire (OPGW) alongwith hardware and fittings.

It,therefore, appeared that PMC was to fulfilthe contractual obligations covered in the

Purchase Order dated 27-09-2010 placed on it by MEGTPCL in so far as it related to

sourcing of equipment and machinery, by way of arranging procurements from M/s

ABB Limited and EIFunder two separate contracts as narrated above.

2.5 PMC appears to be have been engaged by MEGPTCL, a wholly owned

subsidiary of M/s Adani Enterprises Limited, (AEL) and recipient of power

Transmission Licence issued by Maharashtra Electricity Regulatory Authority

Commission (MERC) for setting up two 765 KV Transmission corridor from Tiroda-

Koradi III-Akola II- Aurangabad in Maharashtra State, as a sub-contractor for and on

behalf of MEGPTCL, to execute works in pursuance of the power Transmission Licence

granted to it.

2.6 Vide a document titled Amendment-1 to Agreement No. 415703 dated

30-09-2011 (RUD-D/8)bearing reference no. Ref.415703/Amdt.-1, executed between

PMC and EIF, certain amendments appear to have been carried out. Marine Insurance

which was within the scope of EIF as per the original agreement appears to have been

removed from its scope vide the said Amendment. The total price under the scope of

work covered by the Agreement appears to have been amended and reduced to USD

376,077,628/- from USD 376,195,652/-.

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2.7 Further scrutiny of the documents appeared to reveal that MEGPTCL,

through an application bearing Ref.No. MEGPTCL/Energy/Certificate/01/11 dated

04-09-2011 (RUD/D-9)made to the Principal Secretary, Energy Department,

Government of Maharashtra, Mantralaya Main Building, Mumbai, requested for

issuance of essentiality certificate for import of transformers with accessories & shunt

reactors with accessories for the two transmission lines to be set up in the corridor of

Tiroda-Koradi-Akola- Aurangabad, while making a mention therein of the contract it

entered into with EIF. In its application, MEGPTCL,inter-alia, stated that PMC would

be importing transformers with accessories and shunt reactors, on behalf of MEGPTCL

as EPC contractor from EIF and would avail benefit of General Exemption No. 122. As

per the said application, the goods covered by the essentiality certificate to be issued,

were proposed to be registered with the Kandla Custom House for availing

concessional rate of duty as project imports. As a part of enclosures to the said letter,

MEGPTCL appear to have inter-alia, enclosed certain pages which apparently were

print-outs of product catalogues of M/s Hyundai Heavy Industries Co. Ltd. for shunt

reactors and transformers, thereby prima-facie indicative of the origin and make of the

transformers and shunt-reactors (i.eHyundai make, South Korea) to be supplied by

EIF to PMC. This appears to have been followed up by subsequent applications to the

Principal Secretary, Energy Department, Government of Maharashtra from time to

time through letters dated 24-09-2011, 17-11-2011 and 24-01-2012(RUD-D/10).

Similar correspondence made to Principal Secretary, Energy Department, Government

of Maharashtra seeking essentiality certificate so as to be able to avail concessional

rate of duty were also found in respect of Surge Arresters and Surge Counters to be

supplied by M/s ABB AB, Sweden through its Indian counterpart, M/s ABB Limited to

PMC, based on the application made by MEGPTCL. The Principal Secretary (Energy),

appears to have certified essentiality of goods for concessional rate of duty from time

to time.

2.8 From scrutiny of the documents submitted by the importer, it further

appeared that MEGPTCL made applications to the Commissioner of Customs, Kandla,

seeking to registerthe contract for supply of equipmentsfor availing concessional rate

of duty, to the extent of equipments for which they were in possession of certificate of

essentiality issued by the Government of Maharashra. Based on the applications

received, the office of Commissioner of Customs, Kandla Custom House appeared to

have registered the said project [(Registration No. 27/2011-12-Page No. 95) -F.No.

S/42-38/MEGPTCL/Gr.VI/2011] for assessment under heading 98.01.(RUD-D/11).

Entries in the register were updated for additional value registrationsdepending on

issuance of fresh essentiality certificates from time to time. Details of the registrations

done by the Kandla Custom House, as per information provided by PMC, with

reference to the supplies from EIF covered by Contract no. bearing 415703 dated 01-

10-2010 (RUD-D/12) is summarized in the table below :-

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Table - 1

Value of contracts registered with Kandla Custom House for assessment under

heading 98.01 against supplies covered by Contract no. 415703 dated 01-10-

2010 between PMC and EIF

S.No

.

Date & File No. of REIFstration CIF Value in USD Description of goods

1. S/42-38/MEGPTCL/Gr.VI/2011 dt. 01-11-2011

52313104.21 Auto Transformers, shunt reactors & mandatory spares.

2. S/42-38/MEGPTCL/Gr.VI/2011 dt. 17-11-2011

31872406.27 Auto Transformers & mandatory spares

3. S/42-38/MEGPTCL/Gr.VI/2011 dt.

23.12-2011

50179259.26 Shunt Reactors & mandatory spares

4. S/42-38/MEGPTCL/Gr.VI/2011 dt. 30-12-2011

20529460.48 Shunt Reactors & Mandatory spares

5. S/42-38/MEGPTCL/Gr.VI/2011 dt. 16-02-2012

55154343.68 50179259.12

Shunt Reactors & Mandatory spares Auto Transformers & mandatory spares

TOTAL CIF 260,227,832.90

2.9 From the figures shown in the table above, , it is evident that the

aggregate value of supply of auto transformers, shunt reactors and mandatory spares

to the tune of USD 260,227,832.90 appears to have been registered for assessment

under heading 98.01 by theOffice of Commissioner of Customs, Kandla. Going by the

price schedule summary sheet (RUD-D/13)given at Schedule 1 to Agreement No.

415703 dated 01-10-2010 between EIF and PMC, these items appear to be covered by

Sr.No. A & B. (A I & II and B-I &B-11) and the aggregate price works out to USD

260,269,978, value whereof being by and large in conformity with the aggregate value

registered for concessional assessment as project imports. The value of the other items

covered at Sr. No. C and D of Schedule 1 of the Agreement bearing No. 415703 dated

01-10-2010 between EIF and PMC involving supply of Disc Insulators and Optical

Fiber Ground Wire or Optical Ground Wire (OPGW)with hardware &accessories,

respectively, apparently were not sought to be registered for assessment under

heading 98.01, thereby implying that the these goods were to be cleared at merit rate

of duty.

2.10 Similar details of registration in respect of goods to be sourced by PMC

from M/s. ABB Limited, under Contract dated 28-09-2010 is summarized on the basis

of documents forwarded by the importer :-(RUD-D/14)

Table - 2

Value of contracts registered with Kandla Custom House for assessment under

heading 98.01 against supplies covered by Contract dated 28-09-2010 between

M/s PMC Projects (I) Pvt. Ltd. and M/s ABB Limited

S.No. Date & File No. of Registration CIF Value in USD Description of goods

1. S/42-38/MEGPTCL/Gr.VI/2011 dt. 16-02-2012

17866360 Surge Arrester and Surge Counter

2. S/42-38/MEGPTCL/Gr.VI/2011 dt. 16-02-2012

31991193 Surge Arrester and Surge Counter

3. S/42-38/MEGPTCL/Gr.VI/2011 dt. 07-05-2012

35024201.53 Isolator with one, two earth switch & spares

4. S/42-38/MEGPTCL/Gr.VI/2011

dt. 08-05-2012

51058246 Isolator with one, two earth switch & spares

5. S/42-38/MEGPTCL/Gr.VI/2011 dt. 16-02-2012

34167744 Isolator with one, two earth switch & spares

170,107,744.50

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It appears that pursuant to the above registration, goods were imported by M/s PMC

on high-sea-sale basis from M/s ABB Limited (IEC-0388038047) i.e M/s ABB Limited

(the original importer) imported the aforelisted goods and sold the same on high-sea-

sale basis to M/s PMC Projects (India) Pvt. Ltd., who filed bills of entry claiming

assessment at concessional rate of duty under heading 98.01. Since the present

investigation is in the context of supplies made by EIF, reference to imports by M/s

PMC Projects from ABB Limited, are being made and mentioned solely for the limited

purposes of understanding how the overall scope of work ordered by MEGPTCL on

PMC in the Purchase Order dated 27-09-2010 was further sub-contracted to the two

entities i.e. (i) EIF, and (ii) M/s ABB Limited.

2.11 With regard to the specific request made by this Unit for copies of the

invoices raised by the original supplier/original equipment manufacturer and copies of

the corresponding agreements entered into by EIF with such overseas entities, M/s

PMC Projects (India) Private Limited submitted, in their response dated 12-03-2013

that such documents were required to be obtained from EIF and M/s ABB Limited,

whom they had requested and that the said documents would be submitted

immediately upon receipt from EIF and M/s ABB Limited. Subsequently, vide another

letter bearing Ref.No. PMC/765/DRI/REPLY/1412/13 dated 25-04-2013, (RUD-

D/15)they conveyed that in response to their letter to EIF to provide copies of the

invoices/contracts between them and the original equipment manufacturer, M/s

Hyundai Heavy Industries Co. Ltd., South Korea, EIF had expressed their inability to

provide the requisite documents citing the reason of business confidentiality.

3.01 Imports made in the name of PMC as available on the Electronic-Data-

Interchange (EDI) system were retrieved and examined. It appeared from scrutiny of

the import data that PMC commenced its imports with invoice from EIF in the year

2011. As per the EDI data-base, the first consignment imported under Bill of Entry

No. 740818 dated 03-03-2011 with invoice from EIF involved import of goods declared

to be ‘120 KN and 210 KN Disc Insulators’ which were cleared through JNCH,

NhavaSheva at merit rate of duty applicable at the time of clearance. This

consignment was followed up,inter-alia,by several other imports which were noticed to

have been cleared through Mundra Port at merit rate duty involving clearance of goods

declared to be Glass Disc Insulators, OPGW cable, OPGW hardware and accessories.

The overseas firm, who had raised invoices in the name of PMC, for these

consignmentswas found to be EIF. The EDI data base also reflected certain imports

which were found to have been assessed and cleared at concessional rate of duty

under heading 98.01, details of which are narrated in the following paragraphs

separately.

3.2 Brief particulars of the consignments invoiced by EIF, imported,inter-

alia, by PMC involving import of goods required for setting up/installation of the two

transmission lines are tabulated below in Table-3A (those cleared at merit rate) and

Table-3B (those cleared claiming concessional rate under project import under 98.01)

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Table-3A

(Details of consignments imported by PMC and cleared at merit rate)

S. No.

BE No. & date

SUPPLIER (ELECTROGEN INFRA FZE’S INVOICE NO.

/DATE

INV. VALUE (USD)

BILL OF LADING (B.L.) NO./ DATE

SHIPPER AS PER B.L.

[A] [B] [C] [D] [E] [F]

1 740818/ 03-03-

2011

PMC/EG/11009/001 dt.: 09.02.11/09-02-

2011

4270200 MAEU601299135

/09-02-2011 DALIAN INSULATOR GROUP

CO. LTD

2 3036910/

24-03-2011

PMC/EG/FP09022011/002/15-02-2011

3269009.28 NDACVF300 /15-

02-2011 SEDIVER INSULATORS (SHANGHAI) CO. LTD.

3 3427185/

06-05-2011

PMC/EG/EG11053/DI/004 dt.: 26.04.11/26-

04-2011 8846304

YMLUZ245202791 /05-04-2011

DALIAN INSULATOR GROUP CO. LTD

4 3493704/

13-05-2011

PMC/EG/EG11067/DI/005/26-04-2011

3783025.2 APLU062194693


CO. LTD

5 3525050/

18-05-2011

PMC/EG/SE110325/SE/003 /26-04-2011

989736 YMLUZ230140405

/31-03-2011

SUZHOU FURUKAWA POWER OPTIC CABLE CO. LTD. ,

CHINA

6 3685422/

02-06-

2011

PMC/EG/FP23042011/SI/006 /20-05-2011

5608544.64 YMLUZ230145416

/28-04-2011 SEDIVER INSULATORS (SHANGHAI) CO. LTD.

7 3739813/

08-06-2011

PMC/EG/SE110509/SF/007 /26-05-2011

2499741.2 YMLUZ230148714

/12-05-2011


CHINA

8

4472634/

26-08-2011

PMC/EG/FP15072011/SI/008 /06-08-2011

5608544.64 YMZUZ230162786


9 4798484/

30-09-

2011

PMC/EG/SE110817/SF/012 /26-09-2011

4563413.62 KKLUSH4220867/

04-09-2011


CHINA

10 4799346/

30-09-2011

PMC/EG/FP260822011/SI/011 /26-09-2011

5608544.64 MSCUY5709319/0

2-09-2011 SEDIVER INSULATORS (SHANGHAI) CO. LTD.

11 5327127/

29-11-2011

PMC/EG/EG11217/DI/015 /19-11-2011

5302000 MSCUDL744655


CO. LTD

12 5905812/

03-02-2012

PMC/EG/FP23122011/SI/021 /18-01-2011

5608544.64 YMLUZ230190641


13

5906514/

30-02-2012

PMC/EG/FP16122011

/SI/020 /18-01-2012 5608544.64

NDAEHH600 /13-

12-2011

SEDIVER INSULATORS

(SHANGHAI) CO. LTD.

14

5971442/

10-02-2012

PMCEG111207SF019

/16-01-2011 5356134.48

NDAEHH600/13-

12-2011

SUZHOU FURUKAWA POWER

OPTIC CABLE CO. LTD. , CHINA

15 6225685/

12-03-

2012

PMC/EG/EG12001/DI

/027 /22-02-2012 5470280

MSCUDL786284/

28-01-2012

DALIAN INSULATOR GROUP

CO. LTD

16 6674228/

28-04-

2012

PMC/EG/EG12015/DI

/038/23-04-2012 7699000

MSCUDL815422/

30-03-2012

DALIAN INSULATOR GROUP

CO. LTD

17 6921529/

24-05-

2012

PMC/EG/EG12047/DI/039 dt.: 21.05.12/21-

05-2012

3792053.84 YMLUZ245204311


CO. LTD

18 7420406/

18-07-2012

PMC/EG/FP21062012/SI/043 /12-07-2012

5048000 YMLUZ230223990


19 7421168/

18-07-2012

PMC/EG/EG12094/DI/042 /12-07-2012

2734564 YMLUZ245204378


CO. LTD

20 8104738/

03-10-

2012

PMC/EG/FP06092012/SI/045 /27-09-2012

5410356.4 YMLUZ230241803

/14-09-2012 SEDIVER INSULATORS

(SHANGHAI) CO. LTD. CHINA

21 8752773/

13-12-2012

PMC/EG/SE121116/SF/046 /10-12-2012

2438920 YMLUZ230256175

/22-11-2012


CHINA

22

8823356/

20-12-2012

PMC/EG/FP03122012/SI/047 /19-12-2012

6429000 YMLUZ230259583

/06-12-2012 SEDIVER INSULATORS

(SHANGHAI) CO. LTD. CHINA

23 8924721/

02-01-2013

PMC/EG/SE121210/SF/052 /29-12-2012

4956776 YMLUZ230260792

/13-12-2012


CHINA

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24 9215792/

04-02-2013

PMC/EG/SE130111/SF/054 /29-01-2012

4285010.4 YMLUZ230269660

/17-01-2013


CHINA

25 9613690/

19-03-2013

PMCSE130224SF055 /13-02-2013

2830412.2 YMLUZ230277098

/28-02-2013


CHINA

26 3071687/

22-08-2013

PMC/EG/SE130729/SF/060 /15-08-2013

1851454 YMLUZ231O0478

3/03-08-2013


CHINA

TOTAL 119868113.82

Note 1 :All except Sr.No. 1 (cleared through NhavaSheva) have been cleared through

Mundra Port.

Table-3B

(Details of consignments imported by PMC and cleared at concessional rate of

duty under heading 98.01)

S. No.

BE No. & /date

SUPPLIER

(ELECTROGEN INFRA FZE’S INVOICE NO.

/DATE

INV. VALUE (USD)

BILL OF LADING (B.L.)/ NO./DATE

SHIPPER AS PER B.L.

[A] [B] [C] [D] [E] [F]

1 5094332/

03-11-2011

PMC/EG/20103354TNG001/HHI/009 /09-09-

2011 42836611.3

HDMUUSOMN1190100/ 13-08-2011

HHICL*

2 5094334/

03-11-2011

PMC/EG/20103354TNG001A01/HHI/013 /28-

09-2011 3859806.74

KECO12020337/ 03-09-2011

HHICL

3 5284599/

24-11-2011

PMC/EG/20103354TNG001A02/HHI/014 /21-

10-2011 1385993.65

11109521108011/ 02-10-2011

HHICL

4 5296316/

25-11-2011

PMC/EG/20103354TNG002A01/HHI/010/26-

09-2011 20870378.66

HDMUMAOMN1200100/ 27-08-2011

HHICL

5

5728265/

13-01-2012

PMC/EG/20103355TRG

0022A01/HHI/017 /05-01-2012

15095898.67 HDMD001A/ 27-10-

2011

HHICL

6

5907344/

03-02-2012

PMC/EG/20103355TRO

020A03/HHI/018A /10-01-2012

19395362.21 CPJQJI96MASMUN01

/ 22-11-2011

HHICL

7

5907347/

03-02-2012

PMC/EG/20103354TRO

020A02/HHI/016 /10-01-2012

19419250.35 HDMD001B/ 27-

10-2011

HHICL

8

6066894/

22-02-2012

PMC/EG/20103354TNG

004-003/HHI/022 /14-02-2012

6860212.97 POBUMASMUN120002

/ 22-01-2012

HHICL

9 6118467/

28-02-

2012

PMC/EG/20103355TNG003/HHI/025 /22-02-

2012

13838633.48 POBUMASMUN120001

/ 22-01-2012

HHICL

10 6186246/

06-03-

2012

PMC/EG/20103355TRO022A03/HHI/023 /18-

02-2012

2034920.44 11109521110012/ 01-

12-2011

HHICL

11 6186247/

06-03-

2012

PMC/EG/20103355TRO022A03/HHI/024 /18-

02-2012

2608159.99 11109521110011/ 01-

12-2011

HHICL

12 6186248/

06-03-

2012

PMC/EG/20103355TRO020A03/HHI/018 /10-

01-2012

3751551.3 CPJQJI96MASMUN02

/ 22-11-2011

HHICL

13 6257843/

14-03-2012

PMC/EG/20103355TR0021-01/HHI/028/27-02-

2012 19395362.21

HDEH002B/ 31-01-2012

HHICL

14 6257846/

14-03-2012

PMC/EG/20103355TR0021-01/HHI/029 /27-02-

2012 19419250.35

HDEH002A/ 31-01-2012

HHICL

15 6565565/

17-04-2012

PMC/EG/OIL/HHI/036 /12-04-2012

446057.79 11109521202011/

17-03-2012

HHICL

16 6624398/

23-04-2012

PMC/EG/20103355TNG004/HHI/031 /01-04-

2012 13838633.48

POBUMASMUN120010/ 29-02-2012

HHICL

17 6624583/

23-04-PMC/EG/20103355TNG003/003/HHI/032 /01-

6919316.74 POBUMASMUN120008

/ 29-02-2012

HHICL

of 97

2012 04-2012

18 6624931/

23-04-2012

PMC/EG/20103355TNG003/004/HHI/033/01-

04-2012 6919316.74

POBUMASMUN120009/ 29-02-2012

HHICL

19 6634898/

24-04-2012

PMC/EG/20103355TSO153-01/HHI/035/01-04-

2012 3190913.12

POBUMASMUN120007/ 29-02-2012

HHICL

20 6636126/

24-04-2012

PMC/EG/20103355TNG004/004/HHI/030 /01-

04-2012 6954061.96

POBUMASMUN120011/ 29-02-2012

HHICL

21

6651942/

26-04-2012

PMC/EG/20103355TSO

153/HHI/034 /01-04-2012

6362219.47 POBUMASMUN120006

/ 29-02-2012

HHICL

22

6678179/

28-04-2012

PMC/EG/OIL/HHI/037

dt.: 12.04.12/12-04-2012

3428993.18 11109521109013/

25-03-2012

HHICL

23

7163485/

20-06-2012

PMC/EG/20103354TS01

50-02/HHI/041/20-05-2012

327416.49 GOSUSEL2062505/

08-05-2012

HHICL

24

7915569/

11-09-2012

PMC/EG/20103355TS01

53-02/HI/044/10-08-2012

852816.04 ESSAPUS12072026/2

8-07-2012

HHICL

25 8970044/

08-01-

2013

PMC/EG/OIL/HI/048 dt.: 24.12.12/24-12-

2012

2509261.93 11109521211012/

03-12-2012

HHICL

26 8993748/

10-01-

2013

PMC/EG/OIL/HI/051

/24-04-2012 2035000.42

11109521211015/

10-12-2012

HHICL

27 8994085/

10-01-

2013

PMC/EG/OIL/HI/049 /24-12-2012

5187830.19 11109521211013/

10-12-2012

HHICL

28 9001672/

11-01-

2013

PMC/EG/OIL/HI/050 /24-12-2012

3102860.2 11109521211014/

10-12-2012

HHICL

29 9260637 /08-02-

2013

PMC/EG/OIL/HI/053 /10-01-2012

108533.55 11109521212011/

17-12-2012

HHICL

30 9871984/

16-04-2013

PMC/EG/20123911TS0227/HI/057 /02-04-2013

56316 ESSAPUS13030769/1

9-03-2013

HHICL

31 9954571/

25-04-2013

PMC/EG/20103354TS0150-01/HI/056/02-04-

2013 361940.32

2512-0030-303.012 /16-03-2013

HHICL

Total 253372879.94

Note :1) * HHICL : Hyundai Heavy Industries Co. Ltd., South Korea

2)All except Sr.No. 30 (cleared through NhavaSheva) have been cleared through

Mundra Port.

3.03 Perusal of the EDI data base further revealed that in the case of

shipments by M/s Dalian Insulator Group Co. Ltd. (here-in-after referred to as ‘Dalian’

also) and M/s Sediver Insulators (Shanghai) Co. Ltd. (here-in-after referred to as

‘Sediver’ also),the shipments as listed in Table-3A, comprised various types of Disc

Insulators, whereas in the case of consignments shipped by M/s Suzhou Furukawa

Power Optic Cable Co.Ltd. , China (here-in-after referred to as ‘Suzhou’ also),the

shipments as listed in Table-3A, comprised OPGW cable, hardware and accessories

thereof, as is evident from the description of goods declared in the Bills of Entry as per

the EDI database. It, therefore,prima-facie appeared that the Disc Insulators under

import had been purchased/procured from the two China based original equipment

manufacturers (OEM) viz. M/s Dalian Insulator Group Co. Ltd. and M/s Sediver

Insulators (Shanghai) Co. Ltd.,whereas, the OPGW cable, OPGW hardware and

accessories appear to have been purchased/procured from Suzhou Furukawa Power

Optic Cable Co.Ltd. , China. In respect of consignments shown at Table-3B, the EDI

data base revealed that equipmentsimported i.e. single phase auto transformers,

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single phase shunt reactors, fittings and accessories had been shipped by Hyundai

Heavy Industries Co. Ltd., South Korea. It, therefore,prima-facie appeared that the

said goods had been purchased/procured from the South Korea based original

equipment manufacturer (OEM) viz. M/s Hyundai Heavy Industries Co. Ltd., South

Korea.

4.0 DOCUMENTS FROM BANKS

During enquiries, it was gathered that documents relating to

transactions of goods invoiced by M/s Electrogen Infra FZE, UAE and importation

thereof by M/s PMC Projects (India) Private Limited had,inter-alia, been negotiated

through certain Indian banks having their branches in the UAE. Accordingly,

pursuant to ascertaining the name of some of the banks, correspondence was initiated

with Axis Bank having their branch in Dubai International Financial Centre (DIFC)

Branch in Dubai, to begin with. Vide letter bearing F.No.DRI/MZU/CI-224/2013 dt.

05-04-2013 (RUD-C/3)addressed to the bank authorities, specific

information/documents were sought from them by providing them with details of 29

shipments involving M/s Hyundai Heavy Industries Co. Ltd., South Korea as the

shipper and M/s PMC Projects (India) Private Limited, as the notifying party.

Relevant portion of the specific request made to the Bank is reproduced below :-

“ “i) Copies of invoices, packing lists for the transactions covered by individual

Bills of lading shown in Annexure A to the said letter and/or any other

document submitted/lodged with the bank to facilitate the

negotiation/transaction.

ii) Copies of individual Letters of Credit.

iii) A copy of the Agreement bearing No. 700003 dated 05.10.2010 involving

M/s Electrogen Infra FZE, UAE”.

A general request was made to the bank authorities spelling out the requirement in

terms of documentation i.e. all documents negotiated through the bank in respect of

every shipment of goods by any firm/entity (shipper) to India having M/s PMC

Projects (India) Private Limited as the ‘Notifying party’, wherein the original consignee

is EIF and/or all such documents negotiated by the bank on the instructions of/at the

behest of EIF.

4.1 DOCUMENTS FROM AXIS BANK (First Lot) 4.1.1 Axis Bank, Mumbai responded by providing certain documents through

their letters bearing reference no. AXIS/CO/IBD/2013-14/35 dated 18-04-2013(RUD-

D/16) and AXIS/CO/IBD/2013-14/44 dated 25-04-2013 (RUD-D/17). The

documents forwarded by Axis Bank contained bank attested photo copies of some bills

of lading together with corresponding invoices and packing lists, pertaining to the

shipments covered by such bills of lading. A careful scrutiny of the contents of

individual bills of lading revealed that each of the bills of lading covered goods shipped

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by M/s Hyundai Heavy Industries Co. Ltd., South Korea in the name of PMC. The

name of M/s Hyundai Heavy Industries Co. Ltd., South Korea was indicated as the

‘Shipper’ in the respective bills of lading and the name of PMC was indicated as the

Notifying Party. The box provided for mentioning the name of the Consignee in the

Bills of Lading was found to contain a remark ‘To Order’ or ‘To Order of Axis Bank,

DIFC Branch’. The bills of lading were found to make a mention of Letter of Credit

(L/C) Number which apparently pertained to the Letter of Credit opened by M/s AXIS

Bank Limited, DIFC Bank as the issuing Bank on behalf of EIF, in favour of the

shipper M/s Hyundai Heavy Industries Co. Ltd., South Korea. Many of the bills of

lading contained a reference to an Agreement number ‘700003 dated 05-10-2010’,

apparently to denote that the goods being shipped under cover of that specific bill of

lading were covered by the said Agreement. Brief description of the goods and other

particulars thereof were also found on the body of the bill of lading.

4.1.2 Scrutiny of invoices & packing lists forwarded by the bank in support of

each of the bills of lading revealed that each of these invoices happened to be an

invoice raised by M/s Hyundai Heavy Industries Limited, South Korea (an original

equipment manufacturer-OEM) on or in favour of EIF, with the name of the notifying

party appearing thereon as ‘M/s PMC Projects India Private Limited’. It,

therefore,prima-facie appeared that these invoices (here-in-after referred to as OEM

invoices) had been raised by the OEM M/s Hyundai Heavy Industries Co. Ltd. , South

Korea towards sale of the goods supplied by them.

4.1.3 Each of the OEM invoices was invariably found to be containing a

remark-

‘The goods supplied are as per agreement no. 700003 dated 05-10-2010’.

The OEM-invoices were also found to specifically contain the name of ‘M/s PMC

Projects India Private Limited’ as the notifying party. It also bore reference to a Letter

of Credit No. and date. Each of the OEM invoices was found to be accompaniedby a

corresponding Packing List of Hyundai Heavy Industries Co. Ltd., giving details of the

cargo (here-in-after referred to as the OEM packing list). These OEM-packing lists were

found to invariably contain a mention of the invoice number and date, thereby linking

the packing list to its corresponding invoice. The OEM-packing lists were also found to

inter-alia, contain a mention of the same agreement number &date, and other

particulars, as found mentioned on the body of invoices and bills of lading

(i.eAgreement No. 700003 dated 05-10-2010), name of the notifying party-PMC and

Letter of Credit No. & date). Some of the OEM-packing lists, in addition to the above

details were also found to specifically mention the name of the L/C issuing bank as

‘AXIS Bank Limited, DIFC Branch (Regulated by DFSA) Dubai, UAE and the SWIFT

code of the Bank viz. AXISAEEDXXX. Some of the packing lists also contained details

of the bill of lading no. and date, apparently to denote the bill of lading under which

the cargo covered by such OEM was shipped. In many of the OEM-invoices and

corresponding OEM-packing lists raised by M/s Hyundai Heavy Industries Co. Ltd.,

South Korea, the OEM appears to have specifically mentioned the name and mobile

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number of one Shri Jatin Shah, which was apparently found to be mentioned below

the name and address of EIF, thereby implying that the said Shri Jatin Shah belonged

to and/or was employed and/or represented EIF.

4.1.4 From the analysis of OEM documents forwarded by the Axis Bank, as

discussed in the foregoing paragraphs, it prima-facie appears that the bank has

facilitated EIFin its transaction involving purchase/procurement of goods from the

OEM- M/s Hyundai Heavy Industries Co. Ltd. , South Korea. The services of the Bank

appear to have been,inter-alia, utilized by EIF for remitting the invoice value of goods

procured/purchased from M/s Hyundai Heavy Industries Co. Ltd., South Korea, to the

said OEM, as per the amounts indicated in the respective invoices raised by the OEM

on M/s Electrogen Infra FZE, UAE and in accordance with terms & conditions of the

Letters of Credit covering the said transaction.

4.1.5 Amongst the other documents forwarded by the Bank were copies of

Letters of Credit (L/C) opened by Axis Bank, DIFC, Dubai in the name of applicant

i.eEIF favouring M/s Hyundai Heavy Industries Co. Ltd., South Korea, whose name

has been indicated as the ‘Beneficiary’ in the SWIFT messages pertaining to the letters

of credit. Such L/Cs appeared to cover a fixed lumpsum amount, apparently

representing money payable by EIF to M/s Hyundai Heavy Industries Co. Ltd., South

Korea towards purchase/procurement of goods. The Letters of Credit, further,inter-

alia invariably indicate the name of PMC as the Notifying party and also specify an

Agreement no. (Agreement No. 700003 dated 05-10-2010), thereby implying that the

goods were for eventual supply to PMC.

4.1.6 A copy of the Agreement No. 700003 dated 05-10-2010, (RUD/D-

18)foundrepeatedlymentionedin the OEM-invoices/OEM-packing lists/bills of lading

pertaining to supplies by M/s Hyundai Heavy Industries Co. Ltd., was one of the

documents forwarded by Axis Bank, DIFC, Dubai. Scrutiny thereof revealed that the

Agreement appears to have been executed between EIF having its registered/head

office in Sharjah, UAE and M/s Hyundai Heavy Industries Co. Ltd., South Korea. The

scope of work as stipulated in the said Agreement was for the supply of single phase

auto transformers, single phase shunt reactors, fittings and accessories thereof for

installation of the transmission line in the corridor of Tiroda–Koradi-III - AkolaII -

Aurangabad. Since the scope of supply stipulated in the Agreement between the OEM

and EIF appeared to be identical to scope of supply of Auto transformer and Shunt

Reactors etc. covered by Agreement No. 415703 dated 01-10-2010 between EIF and

PMC, (covered at Sr. No. A and B of Schedule 1 to the said agreement) and because

equipments covered by both these Agreements were apparently meant for the same

transmission line project, it prima-facie appeared that goods covered by Agreement No.

700003 dated 05-10-2010 were supplied to PMC.

4.1.7 In order to ascertain this aspect, efforts made to compare the scope of

supply (Description & Quantity) and price thereof covered by Agreement no. 700003

dated 05-10-2010 between EIF and Hyundai Heavy Industries Co. Ltd. South, Korea

vis-à-vis scope of supply (Description & Quantity) and price thereof covered by

of 97

Agreement no. No. 415703 dated 01-10-2010 between PMC and EIF. In so far as the

supply of Transformers and shunt reactors was concerned, Agreement no. 700003 dt.

05-10-2010 (between EIF and Hyundai) covered supply of 15 numbers of single phase

auto transformers and 50 numbers of shunt reactors, precisely identical to the scope

of supply covered by the Agreement bearing No. 415703 (between EIF and PMC) as is

evident from an equipment-wise aggregate of the figures at Sr.Nos. 1 to 4 of the table

appended at clause 3.02.1 in the said Agreement, which is re-produced below :-

Table-4

Table appended at clause 3.02.1 of Agreement No. 415703 dated 01-10-2010

between PMC and EIF

S No. Item Description Quantity (Nos) Commencement Period

Delivery/ Completion

Period

1 765/400 KV, 500 MVA Single Phase Auto Transformers

7 - Oct 2011


8 - Dec 2011

3 765 KV, 80 MVAR, Single Phase Shunt Reactors 7 - Oct 2011

4 765 KV, 80 MVAR, Single Phase Shunt Reactors 43 - Dec 2011

5 120 KN Disc Insulators for 2 Nos. 765 KV S/C

Transmission Lines.

496598 Jan 2011 Nov 2011

6 210 KN Disc Insulators for 2 Nos. 765KV S/C Transmission Lines

688244 Jan 2011 Nov 2011

7 OPGW along with Hardware’s and fittings for 765 KV S/C Transmission Line.

636 KM Jan 2011 Oct 2011

8 OPGW along with Hardware’s and fittings for 765 KV

S/C Transmission Line.

636 KM Jan 2011 Dec 2011

4.1.8 Perusal of Price Schedule Summary Sheet at Schedule-1(RUD-D/13) of

Agreement No. 415703 dated 01-10-2010 reveals that supplies to be made by EIFto

PMC, on the basis of procurements from M/s Hyundai Heavy Industries Co. Ltd.,

appear to be Sr.Nos. A & B of the summary sheet respectively, as is evident from the

description of goods covered at A & B respectively viz. auto transformers , shunt

reactors & spares thereof. Thus, the proportionate agreement value of goods supplied

by M/s Hyundai Heavy Industries Co. Ltd., to M/s PMC Projects (India) Private

Limited under Agreement No. 415703 works out to 260,269,798 USD. (AI+AII+BI+BII)

- (Scanned Copy of Price Schedule-Summary Sheet to this Agreement is at Para 13.1

below). The back-to-back contract prices are tabulated below :-

Table-5

Contract Price comparison:PMC<->EIF vis-à-vis EIF<->HHICL

Particulars Amt. in US $

a) Price : PMC EIF, UAE Value as per agreement no. 415703 dated 01-10-2010 between M/s Electrogen Infra FZE and M/s PMC Projects (India) Private Limited

260,269,798

b) Price : EIF, UAE HHICL Value as per agreement no. 700003 dated 05-10-2010 between M/s Hyundai Heavy Industries Co. Ltd. , South Korea and M/s Electrogen Infra FZE, UAE

65,328,309

DIFFERENCE 194,941,489

(a) as % of (b) 398%

of 97

It appears that for the same goods, the contract value between PMC and EIF (the

intermediary invoicing agent)is nearly four times (398%) of the contract value between

EIF and OEM (HHICL) the actual overseas supplierwhich appears to be abnormal

andgross inflation, contrary to ordinary economic logic or prudence. The purpose and

cause of entering into agreement bearing No. 700003 dated 05.10.2010 by EIF with

HHICL appears to stem from the Agreement no. 415703 dated 01-10-2010 and

covered at Sr. No. A and B of Schedule 1. Contents of para (b) of the Agreement No.

700003 dated 05-10-2010, which containsa specific reference to Purchase Order dated

27-09-2010 (Order placed on PMC by MEGTPCL) as well as to Agreement dated 01-

10-2010 (Agreement bearing No. 415703 dated 01-10-2010) make it abundantly clear

that it is back-to-back procurement contract entered into by EIF with M/s Hyundai

Heavy Industries Co. Ltd.(HHICL), for actual of supply the goods to PMC in terms of

agreement no. 415703 dated 01-10-2010 entered between EIF with PMC.

4.1.9 It further appeared from a perusal of the signatories to the Agreement

No. 700003 dated 05-10-2010that one ShriDharmesh Parekh had signed the said

Agreement as an authorized signatory for and on behalf EIF, as is evident from the

handwritten text indicating his name appended below his signature. It,

therefore,prima-facie appeared that Shri Dharmesh Parekh represented the UAE

based firm EIF and held a responsible position with them, having signed on its behalf

as an authorized signatory involving consideration of nearly 65 Million USD.

4.1.10 It further prima-facie appeared that the goods shipped from time to time

under cover of bills of lading submitted by the bank involving M/s Hyundai Heavy

Industries Co. Ltd. as the shipper and imported by PMC, were part and parcel of the

goods covered by Agreement No. 700003 dated 05-10-2010. The price shown in

corresponding OEM-invoices raised by M/s Hyundai Heavy Industries Co. Ltd. on EIF

from time to time represented the proportionate contract value of the goods

commensurate with the value of the goods being shipped in piecemeal.

4.1.11 The price payable by EIF to M/s Hyundai Heavy Industries Co. Ltd. as

per the invoices raised by the OEM on EIF has been tabulated below in respect of 26

shipments, on the basis of documents forwarded by Axis Bank, DIFC, Dubai in

response to this Unit’s letter seeking documents for 29 consignments:-

Table-6

Price of goods as per invoices raised by HHICL on EIF

Sr. No.

Bill of Lading No. /date SHIPPER HYUNDAI HEAVY INDUSTRIES CO. LTD. INVOICE NO./DATE

SHIPPER'S INVOICE VALUE (CIF USD)

1 POBUMASMUN120007/29-02-12 20103355TSO153-01/28-02-2012 781704

2 HDMD001A/27-10-11 20103355TSO153-01/28-02-2012 3476403

3 11109521110012/01-12-11 20103355TSO153-01/28-02-2012 613683

4 11109521110011/01-12-11 20103355TSO153-01/28-02-2012 924172

5 POBUMASMUN120006/29-02-2012 20103355TSO153/28-02-2012 1612158

6 ESSAPUS12072026/28-07-2012 20103355TS0153-02/20-07-2012 221306

of 97

7 11109521211015/10-12-2012 NIL/30-11-2012 643021

8 11109521109013/25-03-2012 NIL/26-03-2012 1105332

9 POBUMASMUN120002/22-01-12 20103355TSO153-01/28-02-2012 1740762

10 HDMUMAOMN1200100/27-08-11 20103355TSO153-01/28-02-2012 5165787

11 HDMD001B/27-10-11 20103355TSO153-01/28-02-2012 4469661

12 CPJQJI96MASMUN01/22-11-11 20103355TSO153-01/28-02-2012 4469661

13 POBUMASMUN120001/22-01-12 20103355TSO153-01/28-02-2012 3469843

14 HDEH002B/31-01-12 20103355TSO153-01/28-02-2012 4598482

15 HDEH002A/31-01-12 20103355TSO153-01/28-02-2012 4598482

16 POBUMASMUN120011/29-02-2012 20103355TNG004-004/20-02-2012 1734013

17 POBUMASMUN120010/29-02-2012 20103355TNG004/20-02-2012 3468027

18 POBUMASMUN120008/29-02-2012 20103355TNG003-003/20-02-2012 1385757

19 POBUMASMUN120009/29-02-2012 20103355TNG003-004/20-02-2012 1732196

20 11109521211013/10-12-2012 NIL/30-11-2012 1636376

21 11109521211014/10-12-2012 NIL/30-11-2012 574898.66

22 11109521211012/03-12-2012 NIL/30-11-2012 472101.45

23 HDMUUSOMN1190100/13-08-11 20103355TSO153-01/28-02-2012 10364119

24 KECO12020337/03-09-11 20103355TSO153-01/28-02-2012 1236935

25 11109521108011/02-10-11 20103355TSO153-01/28-02-2012 616927

26 CPJQJI96MASMUN02/22-11-11 20103355TSO153-01/28-02-2012 1170895

TOTAL 62282702.11

4.1.12 Since the name of PMC featured as a notifying party in many of the

above listed bills of lading and corresponding OEM-invoices/packing lists, raised by

Hyundai Heavy Industries Co. Ltd. on EIF, efforts were made to identify the import

particulars for each such consignment i.e. to ascertain the corresponding Bill of Entry

No. & date and the port of import in India. Examination of import particulars thereof

revealed that PMC had utilized these very Bills of Lading, whose numbers are listed

above, for clearance of 26 of the 31 consignments (Table-3B) imported and cleared by

them through Mundra Port at concessional rate of duty, as is evident from the

samebills of lading numbers featuring in the Table 3Bwhich providesparticulars of

consignments imported and cleared by PMC as per the EDI data base.

4.1.13 It, therefore, appears that while the importer utilized the above-listed

bills of lading for customs clearance purpose in India, the value for the purpose of

assessment appears to have been declared on the basis of back-to-back intermediary

invoices raised by EIF on M/s PMC Projects (India) Private Limited. The OEM invoices

and OEM packing lists of M/s Hyundai Heavy Industries Co. Ltd., South Korea do not

appear to be a part of the documents produced to the jurisdictional customs

authorities in India.

4.1.14 It, therefore,prima-facie appears to emerge that for each shipment

imported by M/s PMC Projects (India) Private Limited where EIF, is the

intermediaryinvoicing agent and M/s Hyundai Heavy Industries Co. Ltd. , South Korea

is the shipper, there are two sets of invoices:-

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i) OEM sale invoice of HHICL (Copy of the sale invoice raised by the M/s

Hyundai Heavy Industries Co. Ltd.-Original Equipment Manufacturer-

(OEM) on EIF alongwith corresponding packing list-Invoices raised for

supplies made in pursuance of Agreement No. 700003 dated 05-10-2010

between EIF and HHICL , South Korea)

ii) Intermediaryinvoice of EIF, UAE (Copy of the back-to-back

intermediaryinvoice/packing list raised by EIF on PMC - Invoices raised

for supplies made in pursuance of Agreement 415703 dated 01-10-2010

between PMC and EIF).

Scanned images of two sets of invoices for the same goods (the OEM invoice raised on

EIF and the back-to-back inflated intermediary invoice raised by EIFon PMC)and the

scanned image of the corresponding common Bill of Lading, in respect of one

consignment shipped by HHICL) is reproduced below as illustration:-

of 97

Table-7

Comparison of invoice prices: HHICL(OEM) to EIF vis-a-vis EIF to PMC

SR. NO.

BILL OF LADING NO. /DATE PRICE SHOWN IN OEM (HHICL)

INVOICE USD

PRICE SHOWN IN ELECTROGEN

INVOICE (USD)

(d) as % of (c)

DIFFERENCE IN USD

(a) (b) [c] (d) [e] (f)

1 POBUMASMUN120007/29-02-12 781,704.00 3,190,913.12 408% 2,409,209.12

2 HDMD001A/27-10-11 3,476,403.00 15,095,898.67 434% 11,619,495.70

3 11109521110012/01-12-11 613,683.00 2,034,920.44 332% 1,421,237.44

4 11109521110011/01-12-11 924,172.00 2,608,159.99 282% 1,683,987.99

5 POBUMASMUN120006/29-02-2012 1,612,158.00 6,362,219.47 395% 4,750,061.47

6 ESSAPUS12072026/28-07-2012 221,306.00 852,816.04 385% 631,510.04

7 11109521211015/10-12-2012 643,021.00 2,035,000.42 316% 1,391,979.42

8 11109521109013/25-03-2012 1,105,332.00 3,428,993.18 310% 2,323,661.18

9 POBUMASMUN120002/22-01-12 1,740,762.00 6,860,212.97 394% 5,119,450.97

10 HDMUMAOMN1200100/27-08-11 5,165,787.00 20,870,378.66 404% 15,704,591.70

11 HDMD001B/27-10-11 4,469,661.00 19,419,250.35 434% 14,949,589.40

12 CPJQJI96MASMUN01/22-11-11 4,469,661.00 19,395,362.21 434% 14,925,701.20

13 POBUMASMUN120001/22-01-12 3,469,843.00 13,838,633.48 399% 10,368,790.50

14 HDEH002B/31-01-12 4,598,482.00 19,395,362.21 422% 14,796,880.20

15 HDEH002A/31-01-12 4,598,482.00 19,419,250.35 422% 14,820,768.40

16 POBUMASMUN120011/29-02-2012 1,734,013.00 6,954,061.96 401% 5,220,048.96

17 POBUMASMUN120010/29-02-2012 3,468,027.00 13,838,633.48 399% 10,370,606.50

18 POBUMASMUN120008/29-02-2012 1,385,757.00 6,919,316.74 499% 5,533,559.74

19 POBUMASMUN120009/29-02-2012 1,732,196.00 6,919,316.74 399% 5,187,120.74

20 11109521211013/10-12-2012 1,636,376.00 5,187,830.19 317% 3,551,454.19

21 11109521211014/10-12-2012 574,898.66 3,102,860.20 540% 2,527,961.54

22 11109521211012/03-12-2012 472,101.45 2,509,261.93 532% 2,037,160.48

23 HDMUUSOMN1190100/13-08-11 10,364,119.0

0

42,836,611.30 413% 32,472,492.30

24 KECO12020337/03-09-11 1,236,935.00 3,859,806.74 312% 2,622,871.74

25 11109521108011/02-10-11 616,927.00 1,385,993.65 225% 769,066.65

26 CPJQJI96MASMUN02/22-11-11 1,170,895.00 3,751,551.30 320% 2,580,656.30

TOTAL 62282702.11 252072615.79 404.73% 189,789,914.00

4.1.16 From the figures shown in the Table-7 above, it appears that the price

charged by EIF in the back-to-back invoices raised by it on PMC is substantially

higher than the price of invoice of the OEM- M/s Hyundai Heavy Industries Co. Ltd.

EIF appears to have inflated the invoice price of M/s Hyundai Heavy Industries Co.

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Ltd. to almost about 4 times on an average and raised invoices with such inflated

prices on PMC.On an average, values in the invoices raised by EIFon PMCappearto

be 400% of the values in the OEM invoice price.It, therefore, appears that the

consignments shipped by the OEM-M/s Hyundai Heavy Industries Co. Ltd., South

Korea, imported into India by M/s PMC Projects (India) Private Limited and cleared on

the strength of invoices raised by EIF had been grossly over-valued. It is apparent

that while the goods were shipped from HHICL (OEM) to PMC in India directly, the

invoices were routed through EIF, who merely acted as an intermediary invoicing

agent for facilitating inflation of invoice value. Given the scale and extent of invoice

inflation, it is apparent that it was with fraudulent intent of siphoning money from

India.

4.1.17 As brought out in para 4.1.3 above, the name of Shri Jatin Shah, as a

representative of EIF was found consistently appearing in majority of the

invoices/packing lists raised by M/s Hyundai Heavy Industries Co. Ltd. , South Korea

on EIF. Ondiscreet enquiries regarding Shri Jatin Shah, whose name was appearing

in many of the OEM invoices/packing lists, as a representative of UAE intermediary

EIF, it was gathered that he was an active member of Adani Group, visiting

Ahmedabad regularly to participate in meetings held by the Adani Group. It was also

gathered that he worked in the capacity of ‘Finance Controller’ for Adani Power

Limited. Accordingly, a summons under Section 108 of the Customs Act, 1962 bearing

F.No. DRI/MZU/CI-224/2013/3928 dated 30-04-2013 (RUD-C/4)was issued seeking

his appearance on 06-05-2013 withall agreements/contracts enteredinto/executed by

the Adani Group or its subsidiaries with the Hyundai Group, based on specific inputs

that the Hyundai Group had in the past signed a contract with the Adani Group for

100 units of high voltage transformers.

4.1.18 M/s Adani Power Limited, vide its reply bearing Ref:

APL/DRI/Mundra/088/RR/2013 dated 06-05-2013 (RUD-D/19),while acknowledging

receipt of the summons in the name of Shri Jatin Shah, informed in the letter that

Shri Jatin Shah was no longer working with them since 2009. They further informed

that Adani Power Limited or its subsidiaries had not entered into any

agreements/contracts with the Hyundai Group. In view of the information provided by

M/s Adani Power Limited, it was confirmed that Shri Jatin Shah, Manager of EIF, at

one point of time in the past was an employee of Adani Power Limited.

4.1.19 Shri Rajiv Rustogi, signatory to the aforesaid letter dated 06-05-2013,

was summoned under Section 108 of the Customs Act, 1962 through summons

issued under F.No. DRI/MZU/CI-224/2013/4112 dated 06-05-2013 (RUD-C/5)to

produce contracts relating to purchase/import of transformers with service records of

Shri Jatin Shah (designation & period when employed), date of relieving and copy of

relieving letter/resignation letter.

4.1.20 Shri Rajiv Rustogi, General Manager (Accounts), through his reply

bearing Ref.APL/DRI/Mundra/xxx/RR/2013 dated 09-05-2013 (RUD-

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D/20)responded stating that due to personal reasons, he was unable to remain

present in person. He provided certain information and documents under cover of the

said letter. On import of the transformers by M/s Adani Power Limited or its

subsidiary companies from the Hyundai Group, South Korea, he declared on behalf of

the company that Adani Power Limited or its subsidiaries had not entered into any

agreement/contract for transformers with Hyundai Group, South Korea.

4.1.21 From the employment details of Shri Jatin Shah as provided in the above

said letter, it appears that he worked for M/s Adani Enterprises Limited as Manager

(Finance) in 2002, as Senior Manager (Finance) and Deputy General Manager for

Adani Port Limited between 2003 and 2006, and finally as a General Manager with

Adani Power Limited in 2008 before resigning in August 2009. As per the documents

submitted, it appeared that Shri Jatin Shah submitted his resignation on 19-08-2009,

which was accepted by the company M/s Adani Power Limited on the same day while

communicating to him that he would stand relieved from the services of the company

with effect from 31-08-2009.

4.1.22 It, therefore, appears that M/s Jatin Shah, representative of the Dubai

based firm EIF in the past had been closely associated with the Adani Group by way of

being employed in different capacities in various Adanigroup companies for eight

consecutive years 2002 through 2009.

4.2 DOCUMENTS FROM ICICI BANK LTD (First Lot)

4.2.1 Besides, the Axis Bank Limited, it was gathered that documents relating

to transactions involving invoices raised byEIFonPMC had,inter-alia, been negotiated

through the ICICI Bank Limited, having its branch in the UAE viz. ICICI Bank, DIFC

Branch in Dubai. Accordingly, information was sought from ICICI Bank, DIFC Branch

Dubai, vide letter bearing F.No. DRI/MZU/C.I.-224/2013/3899 dated 30-04-

2013(RUD-C/6), while endorsing a copy thereof to Chief Manager of the ICICI Bank’s

corporate office in Mumbai to co-ordinate in the matter. Since there was no response,

a reminder was sent on 10-06-2013. (RUD-C/7)

4.2.2 The ICICI Bank’s Corporate office in Mumbai forwarded certain

documents under cover of their letter bearing reference no. NIL dated 19-06-2013

(RUD/D-21) as received by them from their DIFC Branch, in Dubai. The documents,

inter-alia, included details of the account held by EIF with their DIFC Branch in

Dubai; KYC (Know Your Customer) verification documents; account opening form;

details of inward and outward remittances into and from the account of EIF; and

certain import/export bills, as described in the letter dated 10-06-2013 of the ICICI

Bank’s DIFC,Dubai branch (RUD/D-22).Documents found relevant to the

investigation are discussed in the following paras.

4.2.3 As per letter dated 26th April 2012(RUD/D-23),written by EIF addressed

to the ICICI Bank Ltd., DIFC, Dubai Branch, the shareholding pattern of EIF was

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informed to the Bank. Relevant contents of the letter,apparently signed by Shri Jatin

Shah, are reproduced below :-

“Please find below the shareholding pattern of Electrogen Infra FZE :

i) Electrogen Infra FZE is 100% owned by Electrogen Infra Holding Pvt. Ltd.

ii) Electrogen Infra Holding Pvt. Ltd. is 100% owned by Asankhya Resources

Pvt. Ltd.

iii) Asankhya Resources Pvt. Ltd. is owned by Eagle Holding Ltd., which is a

nominee shareholder in Asankhya Resources Family Trust.

iv) In Asankhya Resources Family Trust, Mr. Vinod ShantilalAdani is the

settler.

From the above information given to the Bank by EIF, it appears that Shri

Vinod ShantilalAdani had a direct control over the activities of EIF through the

Asankhya Resources Family Trust.

4.2.4 Scrutiny of Audited Financial Statements (stated in US Dollars)

including Directors’ Report of ElectroGen Infra Holding Pvt. Ltd. (here-in-after referred

to as ‘EIH’ ) for the year ended 31-03-2011 (RUD/D-24), which contain parallel data

for the year ended 31st March 2010, revealed as under.

i) EIH was incorporated in Mauritius on 16 July 2009 as a private

company.

ii) In the Corporate Data, Shri Vinod Shantilal Shah has been listed as a

Director of EIH with the date of his appointment as Director shown as

12th January 2010. Other directors with their dates of appointment

and resignations are indicated as under :-

Name Appointed Resigned

GiandeoReemul 16 July 2009 08-March 2011

NavindBeeharry 16 July 2009 08 March 2011

Nasser Ali ShabanAhli 16 July 2009 01 October 2009

Chang Chung-Ling 01 October 2009 12 January 2010

Vinod Shantilal Shah 12 January 2010 N/A

Note :Name of Nasser Ali ShabanAhli, who was appointed Director from the

date of incorporation of the company and who resigned few months i.e

on 01-10-2009 before Vinod Shantilal Shah became a Directoron 12-

01-2010,is noteworthy.He was the initial subscriber on 16-07-2009 i.e

when the company was incorporated in Mauritius to the whole of

equity capital of USD 1000 divided into 1000 shares of USD one each

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of EIH and was thus the sole share-holder of the company. These

shares were thereafter transferred to Shri Vinod Shantilal Shah on 12-

01-2010, after Shri Vinod Shantilal Shah became the sole share-

holder and owner of EIH. Nasser Ali ShabanAhli was also the initial

subscriber to equity capital of AED 1,50,000 divided into one share of

AED 1,50,000 of M/s Sichuan Machinery &Equipments FZE

(name changed to EIF on 04-01-2010) on 07-07-2009, when the

company was registered in the UAE.The whole of this equity

was transferred and sold to EIH on 29-03-2010 after which EIF

became wholly owned subsidiary of EIH.

iii) The Directors’ Report of EIH appears to have been signed on 30-

05-2011 by Shri Vinod Shantilal Shah by order of the Board of

Director of EIH. Balance Sheet of EIH as on 31stMarch 2011 and

its profit and loss account for the year ended 31st March 2011 was

also approved on 30-05-2011 by Shri Vinod Shantilal Shah on

behalf of the Board of Directors of EIH. Incidentally, Shri Vinod

Shantilal Shah was the only Director of EIH as on 31-03-2011 as

is clear from sub-para (ii) above.

iv) As on 31st March 2010, EIH had paid-up share capital of USD

1000 divided into 1000 shares of one USD each which was

increased to USD 1,00,000 divided into one lakh shares of one

USD each by issue of 99,000 shares of one USD each during the

Financial Year 2010-11.

v) EIH had an investment of USD 40,872 as on 31-03-2010 in shares

of an unquoted company which went upto USD 14,81,390 as on

31-03-2011. This investment was in EIF, which was its wholly

owned subsidiary.

vi) EIH received dividend income of USD 53,850,954 during the

Financial Year 2010-11.Since EIH had investment only in EIF,

which was its wholly owned subsidiary, this dividend income was

also received from EIF only.

4.2.5 Scrutiny of Financial Statements of EIF for the year ended 31st March

2011, which included parallel data for the year ended 31st March 2010, revealed as

under :-

i) EIF was a Free Zone Establishment with limited liability registered in

Sharjah Airport International Free (SAIF) Zone, Sharjah. It was

incorporated on 08-July-2009.

ii) EIF had subscribed, issued and paid-up share capital of AED

1,50,000 divided into one share of AED 1,50,000. The subscribed

issued and paid-up share capital was raised during the financial

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year 2010-11 to AED 54,00,000 divided into 36 shares of AED

1,50,000 each.

iii) In the Notes to the Financial Statements, in Note No. 7, it is

mentioned that Share Certificate for share capital as on 31st March

2010 and 31st March 2011 was in the name of EIH. In the Manager’s

Report also, it is mentioned that as on 31st March 2011, the entire

share capital of AED 54,00,000 divided into 36 shares was held by

EIH, Mauritius.

iv) The Manager’s Report as on 31st March 2011 was signed by Shri

Jatin Shah. Financial Statements were also signed by him as

Manager of EIF.

4.2.6 Scrutiny of the application for opening of the account revealed that it was

made on 14-09-2011 signed by two individuals i.e Shri Jatin Shah, an ex-employee of

the Adani Group and Shri MehulJani, both apparently Indian nationals. As per the

business details provided to the Bank while opening of the account, the applicants

had declared nature of their business to be ‘General Trading’ and the country where

major business is carried out as ‘India’. Other information declared in the form was

annual turnover of AED 512 Million. The purpose of opening the relationship was

declared as ‘Loans’(RUD/D-25)

4.2.7 In the Signature Card, the above named two individuals had declared

themselves as Authorised Signatory 1 and Authorised Signatory 2, respectively

(RUD/D-26).Scrutiny of Annexure A to ICICI Bank’s application form (RUD/D-27),

which deals with information relating to Directors, Major Shareholders, Partner etc.,

the name of Shri Jatin Shah was found mentioned as a Director, while the name of

Shri MehulJani was found mentioned as an Authorised Signatory. From the

permanent residential addresses declared by the two individuals representing EIF, it

appears that they were residents of Ahmedabad and Vadodara (earlier Baroda),

respectively.

4.2.8 Scrutiny of a two-page document titled ‘Addendum to Memorandum and

Articles of Association of EIF. Scrutiny of the Addendum reveals that SAIF Zone

authorities have acknowledged the amendment made on 29-03-2010 to the

Memorandum and Articles of Association dated 07-07-2009 of EIF. As per the

amendment, Shri Nasser Ali ShabanAhli, a UAE national holding Passport no.

A1811119, who was the owner of EIF’s entire paid-up share capital of one share of

AED 1,50,000sold, transferred and assigned fully and wholly, the said one share of

EIF to EIH. The Addendum is signed by Shri Vinod Shantilal Shah as representative of

EIH. After execution of the Addendum, EIH has been described as the ‘owner’

substituting Mr. Nasser Ali ShabanAhli. With this sale, transfer and assignment, EIF

became wholly owned subsidiary of EIH with effect from 29-03-2010(RUD/D-28). This

was the second amendment to the Memorandum and Articles Association dated 07-

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07-2009 of EIF. The first amendment was made on 04-01-2010 to change name of the

company to EIF (para 4.3.4 below) and the third amendment was made on 17-06-2010

to increase share capital (para 4.4.12 below).

4.2.9 As percopy of‘Share Certificate No. 4107’ dated 21-06-2010 issued by

Government of Sharjah, SAIF Zone, it is certified that EIH,incorporated in the Republic

of Mauritius, is a registered holder of 36 shares of AED 54,00,0000 of EIF which is

stated to be a limited liability establishment incorporated and licensed at SAIF-Zone

with paid-up capital of Dhs 54,00,000 divided into 36 shares with a value of Dhs

1,50,000 each(RUD/D-29).

4.2.10 As per copy of Global Business Licence No. C211017320 dated 21-01-

2011 granted by the Government of the Republic of Mauritius to EIH, it is, inter-alia,

mentioned that the company shall not offer its shares or otherwise raise capital from

the public(RUD/D-30).

4.2.11 Copy of Certificate of Incorporation on Change of Name issued on 08-01-

2010 by the Registrar of Companies, Republic of Mauritius certifies that the name of

M/s Sichuan Machinery & Equipment Import & Export Co. Ltd have by special

resolution changed its name and is now incorporated under the name of M/s

ElectroGen Infra Holding Pvt. Ltd(RUD/D-31).

4.3 DOCUMENTS FROM BANK OF BARODA

4.3.1 Bank of Baroda, Dubai Main Branch,vide their letter Ref. No. CE:

Compliance:1612/2013 dated 05-11-2013 (RUD/D-32),referring to DRI’s letter

bearing F.No. DRI/MZU/CI-224/2013/3928 dated 30-04-2013 therein, forwarded

documents pertaining to EIF’s transactions to their corporate office located at Bandra-

Kurla Complex, Mumbai, which were retrieved by the officers of DRI on 18-11-2013.

4.3.2 These documents included, inter-alia, account opening form with related

documents and statement of account in respect of the USD account bearing no.

90010200008259held by EIF with BOB, Bur Dubai Branch. The above account was

initially opened on 06-07-2009 in the name of Sichuan Machinery and Equipments

FZE. As per copy of Memorandum and Articles of Association made on 07-07-2009 at

SAIF Zone, UAE, this company was incorporated with Shri Nasser Ali ShabanAhli, a

UAE national, as the ‘owner’ holding the entire authorised and paid-up capital of one

share valued at AED 1,50,000 (RUD/D-33). The Bank was authorised to honour

cheques/bills of exchange and promissory notes drawn, accepted or made on behalf of

the company singly byShri Nasser Ali ShabanAhli. As per the copy of the Licence

Certificate issued by SAIF Zone authorities on 07-07-2009(RUD/D-34)the company

was licensed for ‘general trading’.

4.3.3 Perusal of copy of document titled ‘Board Resolution of M/s Sichuan

Machinery &Equipments FZE dated 19th November 2009’ (RUD/D-35) reveals that the

purpose of the resolution was to open and operate accounts with any bank in the UAE

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in the name of M/s Sichuan Machinery &Equipments FZE, and to avail all types of

banking facilities in the company’s name. It was resolved, inter-alia, to add the name

of Shri Jatin Shah, holder of Indian Passport No. H3015351, as an the authorized

signatory in the bank accounts of M/s Sichuan Machinery &Equipments FZE;to

authorise Shri Jatin Shah to open, operate & close banking accounts with any bank of

the UAE and authorized to sign singly on Bank Mandate documents relating to use of

electronic distribution channels, undertakings, indemnity/security

documents/guarantees/agreements and any Finance Documents on behalf of the

Company excepting cheques and cheque book request forms which could only be

signed by Mr. Naseer Ali Shaban Ali singly. Accordingly, specimen signature card with

specimen signature of Shri Jatin Shah, stating that he could operate the account

singly, was submitted to the bank on 21-11-2009(RUD/D-36).

4.3.4 As per copy of Addendum to the Memorandum and Articles of

Association dated 07-07-2009 of EIF, an amendment made on 04-01-2010 to the

Memorandum and Articles of Association was acknowledged by SAIF Zone

authorities(RUD/D-37).As per the amendment, name of the company was changed

from Sichuan Machinery &Equipments FZE to EIF with same owner i.e. Shri Nasser

Ali ShabanAhli. This Addendum (amendment) to the Memorandum and Articles of

Association dated 07-07-2009 of EIF is immediately prior to the second Addendum as

discussed in para 4.2.8 above. Accordingly, SAIF Zone authorities also changed the

name of the Licence holder in the Licence Certificate no. 01-01-07314 on 14th January

2010 (RUD/D-38).EIF also intimated change of name to BOB, Bur Dubai vide its letter

dated 04-02-2010(RUD/D-39).

4.3.5 From the facts narrated above, it is evident that day to day work relating

to Sichuan Machinery &Equipments FZE was being handled by Shri Jatin Shah, (an

employee of Adani Group till 31-08-2009), since November 2009 even before the

company was taken over on 29-03-2010 by Shri Vinod ShantilalShah through EIH.

4.3.6 The documents processed by Bank of Baroda, Bur Dubai for and on

behalf of EIF were examined. Scrutiny revealed that these contained copies of certain

invoices and packing lists raised,inter-alia, by the some China based firms, who

appeared to be OEMs, on EIF towards the sale of certain goods. Each such

invoice/packing list was found to be accompanied by copy of a bill of lading,

apparently the corresponding bill of lading pertaining to shipment of the goods covered

by theOEM invoice/packing list, as could be reasonably inferred from the name of the

OEM raising the invoice whose name also appears as the ‘shipper’ in the

corresponding bill of lading found accompanying the invoice. On the basis of

commonalities appearing in the invoices, an OEM-wise summary is tabulated below:-

Table-8

Summary of invoices raised by three OEMs(Dalian, Sediver& Suzhou) on EIF

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Sr.No.

Name of the OEM-firm

raising the invoice/ packing list

Brief Description

of goods as per OEM invoice raised on

EIF

Description of the project for which

goods are meant as declared in the invoices

Contract/ Agreement No.

declared in the invoices

Notifying party as appearing in

the BL accompanying the invoice

Total Number of

distinct consignments for which

invoices available

1 Dalian

Insulator Group Co. Ltd, China

Disc

Insulators

2 nos. of 765KV S/C

(Quad Bersimis) Tiroda-Koradi-III-Akola II-Aurangabad Transmission Lines.

700002 dated 07-

10-2010

M/s PMC

Projects (India) Pvt. Ltd., Mundra Port, Navinal Islands, Mundra-

370 421

8

2 Sediver Insulators

(Shanghai) Co. Ltd., China

Toughened Glass Disc

Insulator

2 nos. of 765KV S/C (Quad Bersimis)

Tiroda-Koradi-III-Akola II-Aurangabad Transmission Lines.

700001 dated 07-10-2010

M/s PMC Projects (India)

Pvt. Ltd., Mundra Port, Navinal Islands, Mundra-370 421

9

3 Suzhou Furukawa Power Optic

Cable Co. Ltd. , China

OPGW with 8 Fibre with fittings &

accessories

2 nos. of 765KV S/C (Quad Bersimis) Tiroda-Koradi-III-

Akola II-Aurangabad Transmission Lines.

700004 dated22-10-2010

M/s PMC Projects (India) Pvt. Ltd., Mundra

Port, Navinal Islands, Mundra-370 421

8

TOTAL 25

4.3.7 From the data given in Table-8 above, it appears that in the case of 25

consignments, the transactions of sale/procurement by and between the respective

OEMs and EIF appear to have been negotiated through Bank of Baroda.

4.3.8 From analysis of the contents of the OEM documents, it prima-facie

appears that the Bank of Baroda, Bur Dubai Branch has facilitated its customer EIF

in the transactionsrelating to purchase/procurement of goods from the respective

OEMs viz. the transactions with M/s Dalian Insulator Group Co. Ltd. and M/s

SediverInsulators (Shanghai) Co. Ltd. for procurement/purchase of insulators, and the

transactions with Suzhou Furukawa Power Optic Cable Co.Ltd., China,for

procurement/purchase of OPGW cable, OPGW hardware and accessories. The services

of the Bank (Bank of Baroda, Bur Dubai) appear to have been,inter-alia, utilized by

EIF for remitting the value of the goods as per invoices raised on it by the respective

OEM firms.

4.3.9 Amongst other documents submitted by Bank of Baroda, Bur Dubai were

copies of Letters of Credit (L/Cs) opened by Bank of Baroda, Bur Dubai on behalf of

the applicant i.eEIF favouring the three OEM firms, whose names have been indicated

as the ‘Beneficiary’ in the SWIFT messages pertaining to such Letters of Credit. Such

L/Cs appeared to cover a fixed lump sum amount, apparently representing money

payable by EIF to the respective OEM towards goods supplied to PMC. The Letters of

Credit further,inter-alia, invariably indicate the name of M/s PMC Projects (India)

Private Limited as the ‘Notifying party’or ‘Notified Party’ thereby implying that the

goods were for supply to M/s PMC Projects (India) Private Limited. The Letters of

Credit were also found to make a mention of an Agreement no. (Agreement Numbers

reflected in Table 8 above against the name of respective OEMs were found mentioned

in the copy of the related letter of credit) purported to be Agreement executed by EIF

with the respective OEMs.

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4.3.10 The price payable by EIF to the OEMs towards goods supplied by the

three OEMs, respective OEM invoice-wise, has been tabulated below in respect of the

25 shipments, summarised at Table-8 above, on the basis of documents negotiated

through Bank of Baroda, Main Branch, as obtained by this Unit :-

Table-9

Invoice Price of goods as per invoices raised by three OEMs (Dalian Insulator

Group Co. Ltd., Sediver Insulators (Shanghai) Co. Ltd. and M/s Suzhou Furukawa

Power Optic Cable Co. Ltd. China) on Electrogen Infra FZE, UAE

S. No.

BILL OF LADING No. /DATE SHIPPER AS PER B.L.

SHIPPER INVOICE NO. /DATE VALUE (USD)

1

MAEU601299135

/09-02-2011 DALIAN INSULATOR GROUP CO. LTD EG11009/06-01-2011 605250

2 NDACVF300 / 15-02-2011

SEDIVER INSULATORS (SHANGHAI) CO. LTD.

FP09022011/ 09-02-2011 463342

3 YMLUZ245202791 /05-04-2011 DALIAN INSULATOR GROUP CO. LTD EG11053/ 06-01-2011 1253880

4

APLU062194693

/31-03-2011 DALIAN INSULATOR GROUP CO. LTD EG11067/ 18-03-2011 536176.8

5 YMLUZ230140405 /31-03-2011

SUZHOU FURUKAWA POWER OPTIC CABLE CO. LTD. , CHINA SE110325/ 25-03-2011 85177.3

6 YMLUZ230145416/28-04-2011


FP23042011/ 23-04-2011 794944.8

7 YMLUZ230148714/12-05-2011

SUZHOU FURUKAWA POWER OPTIC CABLE CO. LTD. , CHINA SE110509/ 09-05-2011 185491.65

8

YMZUZ230162786

/22-07-2011

SEDIVER INSULATORS (SHANGHAI)

CO. LTD. FP15072011/15-07-2011 794944.8

9 KKLUSH4220867/04-09-2011

SUZHOU FURUKAWA POWER OPTIC CABLE CO. LTD. , CHINA SE110817/17-08-2011 438181.3

10 MSCUY5709319/ 02-09-2011


FP260822011/26-08-2011 794944.8

11 MSCUDL744655 /11-11-2011 DALIAN INSULATOR GROUP CO. LTD EG11217/19-10-2011 751500

12 YMLUZ230190641/30-12-2011

SEDIVER INSULATORS (SHANGHAI) CO. LTD. FP23122011/23-12-2011 794944.8

13 NDAEHH600 / 13-12-2011

SEDIVER INSULATORS (SHANGHAI) CO. LTD. FP16122011/16-12-2011 794944.8

14 NDAEHH600/ 13-12-2011


15

MSCUDL786284/

28-01-2012 DALIAN INSULATOR GROUP CO. LTD EG12001/04-01-2012 775350

16 MSCUDL815422/ 30-03-2012 DALIAN INSULATOR GROUP CO. LTD EG12015/24-02-2012 1091250

17 YMLUZ245204311/04-05-2012 DALIAN INSULATOR GROUP CO. LTD EG12047/23-04-2012 537477.3

18

YMLUZ230223990

/28-06-2012


CO. LTD. FP21062012/21-06-2012 715500

19 YMLUZ245204378/23-06-2012 DALIAN INSULATOR GROUP CO. LTD EG12094/18-05-2012 387576

20 YMLUZ230241803/14-09-2012

SEDIVER INSULATORS (SHANGHAI) CO. LTD. CHINA FP06092012/06-09-2012 766857.6

21 YMLUZ230256175 /22-11-2012


22

YMLUZ230259583

/06-12-2012


CO. LTD. CHINA FP03122012/03-12-2012 911250

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23 YMLUZ230260792/13-12-2012


24 YMLUZ230269660/17-01-2013


25 YMLUZ230277098/28-02-2013


TOTAL 14939029.33

4.3.11 Since the name of M/s PMC Projects (India) Private Limited

appearedunder the column ‘Notify Party’ invariably in each of above listed bills of

lading pertaining to individual shipments by the respective OEMs, efforts were made

to identify the import particulars for each such consignment i.e to ascertain the bill of

entry no. & date and port of import, from the particulars available on individual bill of

lading. Examination revealed that the aforesaid bills of lading were the bills of lading

pertaining to 25 consignments (Sr.No. 1 to 25 of Table-3A) imported and cleared by

PMC Projects (India) Private Limited, as evident from the same bill of lading numbers

featuring in the table-3A, which provides details of consignments imported and cleared

by M/s PMC Projects (India) Private Limited as per the EDI data base.

4.3.12 It, therefore, appears that while the importer utilized the above-listed

bills of lading for customs clearance purpose in India, the value for the purpose of

assessment appears to have been declared on the basis of back-to-back invoices

raised separately by EIF on M/s PMC Projects (India) Private Limited. The respective

OEM invoices and packing lists do not appear to be part of the documents produced

by PMC to the jurisdictional customs authorities in India, on the strength of which

cargo appears to have been assessed and cleared, as was also the case with

procurements by EIF from M/s Hyundai Heavy Industries Co. Ltd.

4.3.13 It, therefore,prima-facie appears to emerge in the case of these

transactions also that for each shipment imported by M/s PMC Projects (India) Private

Limited where EIF is the intermediary invoicing agent and one of three OEMs is the

shipper, there are two sets of invoices:-

i) OEM sale invoices of the three OEM firms (Copies of the sale invoices

raised by each of the three OEMs viz. M/s Dalian Insulator Group Co.

Ltd., M/s Sediver Insulators (Shanghai) Co. Ltd. and Suzhou Furukawa

PowerOptic Cable Co.Ltd., China, onEIF along-with corresponding

packing lists-)

ii) Intermediary invoices of EIF, UAE (Copies of the back-to-back

intermediary invoices/packing lists raised by EIF on M/s PMC Projects

India Private Limited)-Invoices raised for supplies made in pursuance of

Agreement 415703 dated 05-10-2010 between PMC and EIF.)

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4.3.14 A comparison of prices between the two sets of invoices is tabulated

below for better appreciation of scale and extent of price difference:-

Table-10

Comparison of invoice prices: Three OEMs to EIF vis-a-vis EIF to PMC

SR. NO.

BILL OF LADING NO. /DATE PRICE SHOWN IN OEM

INVOICE USD

PRICE SHOWN IN ELECTROGE

N INVOICE (USD)

[D] AS % OF [C] DIFFERENCE IN USD

(A) (B) [C] [D] [E] [F]

1 MAEU601299135 /09-02-2011 605250 4270200 706 3664950

2 NDACVF300 / 15-02-2011 463342 3269009.3 706 2805667.28

3 YMLUZ245202791 /05-04-2011 1253880 8846304 706 7592424

4 APLU062194693 /31-03-2011 536176.8 3783025.2 706 3246848.4

5 YMLUZ230140405 /31-03-2011 85177.3 989736 1162 904558.7

6 YMLUZ230145416/28-04-2011 794944.8 5608544.6 706 4813599.84

7 YMLUZ230148714/12-05-2011 185491.65 2499741.2 1348 2314249.55

8 YMZUZ230162786/22-07-2011 794944.8 5608544.6 706 4813599.84

9 KKLUSH4220867/04-09-2011 438181.3 4563413.6 1041 4125232.32

10 MSCUY5709319/ 02-09-2011 794944.8 5608544.6 706 4813599.84

11 MSCUDL744655 /11-11-2011 751500 5302000 706 4550500

12 YMLUZ230190641/30-12-2011 794944.8 5608544.6 706 4813599.84

13 NDAEHH600 / 13-12-2011 794944.8 5608544.6 706 4813599.84

14 NDAEHH600/ 13-12-2011 333245.16 5356134.5 1607 5022889.32

15 MSCUDL786284/ 28-01-2012 775350 5470280 706 4694930

16 MSCUDL815422/ 30-03-2012 1091250 7699000 706 6607750

17 YMLUZ245204311/04-05-2012 537477.3 3792053.8 706 3254576.54

18 YMLUZ230223990/28-06-2012 715500 5048000 706 4332500

19 YMLUZ245204378/23-06-2012 387576 2734564 706 2346988

20 YMLUZ230241803/14-09-2012 766857.6 5410356.4 706 4643498.8

21 YMLUZ230256175 /22-11-2012 194125.39 2438920 1256 2244794.61

22 YMLUZ230259583/06-12-2012 911250 6429000 706 5517750

23 YMLUZ230260792/13-12-2012 391512.37 4956776 1266 4565263.63

24 YMLUZ230269660/17-01-2013 329586.44 4285010.4 1300 3955423.96

25 YMLUZ230277098/28-02-2013 211576.02 2830412.2 1338 2618836.18

14939029.33 118016659.6 858.46% 103077630.27

4.3.15 From the figures shown in Table-10 above, it appears that the price

charged by EIF in the invoices raised by it on M/s PMC Projects (India) Private Limited

is substantially higher than the price for corresponding shipments charged by these

OEMs. The invoice price of the respective OEMs appears to have been grossly inflated

in the back-to-back invoice raised by EIF on M/s PMC Projects (India) Private Limited.

It, therefore, appears that consignments shipped by the respective OEMs and imported

into India by M/s PMC Projects (India) Private Limited on the strength of grossly

inflated invoices raised by EIF had been cleared by resorting to gross over-valuation.

It is apparent that while the goods were shipped from the respective OEMs to PMC in

India directly, the invoices were routed through EIF, who merely acted as an

intermediary invoicing agentfor facilitating invoice inflation. The modus-operandi can

be diagrammatically described as under:-

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Given the scale and extent of invoice inflation and the relationship, it is apparent that

it was done with fraudulent intent of siphoning of public money from India.

4.3.16 Scrutiny of OEM invoices raised by the above named three OEMs on EIF,

it was observed that many of the OEM invoices contained references to certain

Agreement Numbers and dates, which were found to be distinct for each OEM raising

the invoice as shown below :-

Table-11

Details of Agreements between the three China based OEMs and EIF

Sr.No. Name of the OEM Agreement no. found mentioned in the OEM

invoices

1. Sediver Insulators (Shanghai) Co. Ltd., China

Agreement No. 700001 dated 07-10-2010

2. Dalian Insulator Group Co Ltd. Agreement No. 700002 dated 07-10-2010

3. Suzhou Furukawa Power Optic Cable Co. Ltd. , China

Agreement No. 700004 dated 22-10-2010

It appeared that the Agreement Numbers, referred in the OEM invoices as

above,were the Agreements executed by the respective OEMs with EIF. Supplies under

the respective OEM invoices apparently were being made in pursuance of these

Agreements.

4.3.17 On request, Axis Bank, DIFC Bank, Dubai, vide their letter bearing

Ref.No. AXIS/DIFC/55/2013-14 dated 10-04-2014 (RUD-D/40)forwarded,interalia,

bank attested photo-copies of each of the three Agreements referred to in the Table-11

above.

4.3.18 Key particulars of the respective Agreements in terms of description,

quantity and contract price as available in these Agreements are tabulated below :-

Table-12

Summary of Agreements between the three China based OEMs with EIF in terms

of description, quantity and value of goods

S.No Agreement No. /date

Executing parties to the contract

Item No.

Description of goods

Quantity (Nos.) Agreement value/consideration in USD

1 2 3 4 5 6 7

8 700001/ 07-10-2010

Sediver Insulators (Shanghai) Co. Ltd., China and

EIF

i)

120 KN Toughened

glass disc insulators

248299 Nos.

5938460.1

ii)

210 KN Toughened


341622 Nos.

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2 700002/

07-10-2010

Dalian Insulator

Group Co Ltd and EIF

i)

120 KN Toughened


248299 Nos.

5938460.1

ii)

210 KN Toughened


341622 Nos.

3 700004/ 22-10-2010

Suzhou Furukawa Power Optic Cable Co. Ltd. ,

China and EIF

i) OPGW with 8 Fibre

1272 KMS.

2637757

ii) Fitting and

accessories 341622

TOTAL 14514569.20

4.3.19 Each of these Agreements were found to make a mention of an

Agreement dated 01-10-2010 between the contractor and employer, designated as

PMC Projects (India) Private Limited and EIF thereby clearly enabling inference that it

referred to Agreement No. 415703 dated 01-10-2010 between the two parties.

Therefore, a scrutiny was done to examinethe scope of the goods described in the three

Agreements vis-à-vis those mentioned in the said Agreement 415703 dated 01-10-

2010 between PMC and EIF which revealed that the description and quantity of

different types of disc insulators and OPGW with hardware& fittings mentioned in the

three Agreements with OEMs were covered at Sr.No. 5 to 8 in the table appended at

clause 3.02.1 in the said Agreement between PMC and EIF as tabulatedbelow :-

Table-13

Table appended at clause 3.02.1 of Agreement No. 415703 dated 01-10-2010

between PMC and EIF

S No. Item Description Quantity (Nos) Commencement Period

Delivery/ Completion

Period


7 - Oct 2011


8 - Dec 2011

3 765 KV, 80 MVAR, Single Phase Shunt Reactors 7 - Oct 2011

4 765 KV, 80 MVAR, Single Phase Shunt Reactors 43 - Dec 2011

5 120 KN Disc Insulators for 2 Nos. 765 KV S/C

Transmission Lines.

496598 Jan 2011 Nov 2011

6 210 KN Disc Insulators for 2 Nos. 765KV S/C Transmission Lines

688244 Jan 2011 Nov 2011

7 OPGW along with Hardware’s and fittings for 765 KV S/C Transmission Line.

636 KM Jan 2011 Oct 2011

8 OPGW along with Hardware’s and fittings for 765 KV

S/C Transmission Line.

636 KM Jan 2011 Dec 2011

4.3.20 An aggregate of the same type of insulators covered by the two OEM

Contracts (Sr.No. 1 & 2) shown in Table-12above match with the figures of the same

type of insulators as shown at Sr.No. 5 and 6 of Table-13 inasmuch as in respect of

120 KN Toughened glass disc insulators at Sr.No.1(i) + 2(i) of Table-12, quantity works

out to 248299 + 248299 =496598- which is the same as the quantity shown at Sr.no 5

of Table-13 and in respect of 210 KN Toughened glass disc insulatorsat Sr.No. 1(ii) +

2(ii) of Table-12, quantity works out to 341622 + 341622 = 688244, which is same as

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the quantity shown at Sr.No. 6 of Table-13 above.The quantity of OPGW shown at

Sr.No. 3(i) of Table-12 matches with the aggregate of quantities shown at Sr.No. 7 & 8

(636+636=1272) of Table-13 above.

4.3.21 It, therefore, appears evident that the description and quantity of the

scope of supplies covered by the three OEM-Agreements with EIFshown at sr.no. 1, 2&

3 of Table-12above are identically covered in terms of description and quantity, for

supply under Agreement No. 415703 dated 01-10-2010 between PMC and EIF (Table-

13 above)

4.3.22 A comparison of the value of the same set of goods, with identical

description and quantity, indicated as consideration in two different sets of

agreements reveal gross disparity at the contract level as shown in the table below :-

Table-14

Contract Price as per Agreements between PMC & EIF vis-à-vis the Agreements

between EIF & the three OEMs (Sediver, Dalian & Suzhou)

S.No Description of goods Price as per Agreement No.

415703/ 01-10-2010 as per

break-up given at Schedule 1

Price Schedule Summary

Sheet (USD)

Price as per

OEM

Agreements

(USD)

Difference

(USD)

(C) as % of

(D)

(A) (B) (C) (D) (E) (F

1. Disc Insulators (120 KN

+ 210 KN)

Sub-total of C

(C.I + CII)

83,794,854 11,876,920.2 71,917,933.8 705.53%

2 Optical Fiber Ground

Wire with hardware and

accessories

Sub-total D 32,131,000 2,637,757 29,495,243 1218.12%

NOTE: - Scanned Copy of Price Schedule Summary Sheet of the Agreement no.

415703 Dt. 01-10-2010 between PMC and EIF is at para 13.1 below

4.3.23 It appears that Disc Insulators supplied at an aggregate cost of USD

11876920.2 by the two OEMsi.eM/s Sediver Insulators (Shanghai) Co. Ltd., China and

Dalian Insulator Group Co Ltd. China, and OPGW hardware and accessories for USD

2,637,757/- from M/s Suzhou Furukawa Power Optic Cable Co. Ltd. , Chinawere to

be invoiced to PMC under Agreement No. 415703 dated 01-10-2010 at contract value

consideration of USD 83,794,854 and USD 32,131,000 which works out to approx.

705.53% & 1218.12% of the corresponding OEM prices, respectively.

4.4 KYC DOCUMENTS FROM AXIS BANK (Second Lot)

4.4.1 Axis Bank, DIFC Branch, Dubai submitted certain documents vide their

letter bearing Ref.No. AXIS/DICF/1229/2013-14 dated 18th December 2013 (RUD-

D/41). It was, inter-alia, conveyed by the bank in its letter that EIF held a current

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account bearing no. 912020200000514 opened on 20-07-2010 and that EIH was the

parent company of EIF. The documents forwarded by the bank included copies of

account opening form alongwith supporting KYC documents submitted by EIF; copies

of the bank account statement since inception of the account till 12-12-2013 and copy

of the shareholding pattern of EIF. Documents relevant to the investigation are

discussed in the following paras.

4.4.2 As per Section I for stating Client Details, Analysis &Consent Form, EIF

have declared the name of Bank of Baroda, Bur Dubai, Main Branch as their principal

bankers. In the information provided regarding accounts held with other banks, they

have declared the names of Bank of Baroda and Standard Chartered Bank. With

regard to the declaration of their business activity, it was declared that it was a new

company and incorporated with the object of trading in power equipment.

Regarding the declaration on source of funds, EIF has declared that their promoter

was EIH, who would be bringing equity as and when required from their own

sources. On the reason for applying for opening of the account, they have declared

“asset handling”. The application appears to have been signed by Shri Jatin Shah on

10-07-2010(RUD/D-42).

4.4.3 As per Section II for details of Authorised Signatory/Director/Beneficial

Owner, the name and other personal details of Shri Vinod Shah and Shri Jatin Shah

were found declared. While employment details in terms of occupation and corporate

title were not filled in for Shri Vinod Shah, Shri Jatin Shah’s occupation was declared

as ‘service’ and his corporate title as ‘Manager’(RUD/D-43).

4.4.4 As per resolution dated 10-07-2010 of the Board of Directors of EIF,

available in the records of the bank, it was resolved that a bank account be opened in

the name of EIF and Shri Vinod S Shah &Shri Jatin C Shah be designated as

authorized signatories to operate the account and sign documents without any

limit(RUD/D-44).

4.4.5 From letter dated 10-07-2010 of EIF addressed to Axis Bank, it is

certified by Shri Jatin Shah as Chief Financial Officer of EIF that Shri Vinod Shantilal

Shah, Shri Moreshwar V. Rabade and Shri Jatin C Shah were Directors of

EIF(RUD/D-45).

4.4.6 The documents included a copy of the Licence Certificate No. 01-01-

07314 dated 14-01-2010 issued to EIF by SAIF Zone authorities, which was also

found in the records of the documents pertaining to Bank of Baroda, Bur Dubai (para

4.3.4 above)(RUD/D-46).

4.4.7 As per copy of Resolution dated 19-05-2011 passed by the Board of

Directors of EIF, it was resolved, inter-alia, that Shri Vinod Shah wasauthorized to

operate the account of EIF singly without any limit and that any two of the three

persons viz. Shri Jatin Shah, Shri MehulJani and Shri MiteshJani, could operate the

account jointly without any limit (RUD/D-47)

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4.4.8 As per letter dated 14-10-2012 submitted by EIF to Axis Bank, Shri Jatin

Shah and Shri Moreshwar V Rabadehad been certified as Directors of EIF (RUD/D-

48).

4.4.9 In letter dated 23-10-2012 addressed to the Bank, EIF informed the

Bank about the resignation of Vinod Shantilal Shah as a Director of their holding

company-EIH w.e.f. 31-05-2011(RUD/D-49).

4.4.10 In another letter dated 23-10-2012 addressed to the Bank, EIF has

confirmed the names of Shri Jatin Shah, Shri MehulJani and Shri MiteshJani as the

authorized signatories of EIF and the names of its directors as Shri Jatin Shah and

Shri MoreshwarRabade. This letter also reitereated that 100% of the equity capital of

EIF was held by EIH(RUD/D-50).

4.4.11 Copies of the amended License Certificates issued by SAIF Zone

authorities as of 07-08-2012 and 19-06-2013 show EIF as a firm engaged in “general

trading” activity & owned by EIH with Shri Jatin Shah as the manager(RUD/D-51).

EIF was also holding a Trading Licence issued by Jumeirah Lake Tower authorities

bearing Licence No. JLT-65859, as a Branch office, having address Unit N. 2707,

Jumeirah Business Center 5 Plot No.W1, Jumeirah Lakes Towers, Dubai, United Arab

Emirates(RUD/D-52). The copy of the said Trading Licence shows Shri Jatin Shah as

the Manager and activity undertaken by the company as Trading in Equipment related

to power lines, ports and transmission lines.

4.4.12 The documents include copy of the Addendum to the Memorandum &

Articles of Association dated 07-07-2009 of EIF. Vide this addendum, SAIF Zone

authorities acknowledged amendment made on 17-06-2010 to the Memorandum &

Articles of Association of EIF for increasing the share capital from AED 1,50,000 to

AED 54,00,000(RUD/D-53). The Addendum was signed by Shri Vinod Shantilal Shah

as a representative of EIH. This is the third Addendum to the Memorandum &

Articles of Association of EIF dated 07-07-2009, the other two being dated 04-01-2010

for change of name and 29-03-2010 for transfer of ownership as discussed at para

4.3.4 and 4.2.8 above respectively.

4.4.13 The documents include a copy of Register of Members of EIH certified on

25-01-2010 by Shri GiandeoReemul, for and on behalf of Trustlink International

Limited, Company Secretary(RUD/D-54). A scanned image of the Register of Members

is shown below for ease of appreciation

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4.4.14 Perusal of the Register of Members shows that on 16-07-2009 i.e the

date when EIH was incorporated in Mauritius, 1000 shares of USD 1 each (which was

the entire authorised and paid-up capital of EIH as on 16-07-2009) with distinctive

numbers from 0001 to 1000 were allotted to Nasser Ali Shaban Ahli. The same shares

were transferred on 01-10-2009 from Nasser Ali Shaban Ahli to Chang Chung Ling

and further transferred to Shri Vinod Shantilal Shah on 12-01-2010.

4.5 Documents from ICICI Bank Limited (2nd Lot)

4.5.1 In response to letter dated 27-03-2014, ICICI Bank, Singapore through

letter dated 02-04-2014 (RUD/D-55)conveyed that they had provided Advance

Payment Guarantee (APG) facility to EIF; that EIF did not accept and that the facility

was, therefore, not availed by EIF. The Bank also conveyed that no documents had

been lodged by EIF with the Singapore Branch. Therefore, the issue was taken up and

pursued with officials of ICICI Bank’s corporate office at Bandra Kurla Complex,

Mumbai. ICICI Bank, vide their letter dated 07-04-2014 (RUD-D/56),forwarded

certain documents, which appeared to be documents submitted by EIF to the Bank

authorities while applying for the APG facility. Documents relevant to this

investigation are discussed in the following paras.

4.5.2 From the documents forwarded by the Bank, it appeared that while

applying for APG facility, EIF had provided on 09-04-2010 a background of itself in a

document titled ‘Brief Background’(RUD-D/57),wherein they hadstated that the

company was established with SAIF Zone in July 2009 in the name and style of

Sichuan Machinery and Equipments FZE and with effect from 04-01-2010, the name

was changed to EIF.

4.5.3 In the said documents, EIF also disclosed to the bank on 09-04-2010

that it is a wholly owned subsidiary of EIH, registered in Mauritius,owned by Shri

Vinod Shantilal Shah. The names of Shri Vinod S Shah, Shri M.V.Rabade and Shri

Jatin Shah have been mentioned as Board Members of EIF.

4.5.4 ICICI Bank further submitted certain documents vide their letter

dated16-04-2014(RUD/D-58)which included a document titled ‘Details of Director’

provided by EIF to them at their specific insistence(RUD/D-59). Thisdocument

provides names and other particulars of Shri Jatin Champaklal Shah and Shri

Moreshwar Vasant Rabade, as Directors of EIF.MoreshwarVasantRabade appears to

be full name of ‘M.V.Rabade’ listed as one of members of the Board of Director of EIF

in the document titled ‘Brief Background’ referred to at the foregoing paragraph 4.5.2

above. The documents also include a certificate dated 01-06-2010 by Shri Jatin Shah

as Chief Financial Officer of EIF certifying that as on that date, Shri Vinod Shantilal

Shah, Shri Moreshwar V.Rabade and Shri Jatin C. Shah were members of the Board

of Directors of EIF(RUD/D-60).

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5.0 Visit to the offices of Adani Group companies in Ahmedabad and

summones issued to various persons of the group including those connected

with EIF.

5.1 The supplier on record for many of the Adani Group companies including

PMC was the UAE based firm EIF, which appear related to the Adani Group as

brought out elsewhere in this notice. Efforts were, therefore, made to obtain

documents covering transactions between EIF and overseas based OEMs/actual

suppliers, in the case of shipments where the goods were eventually supplied to one or

more of the Adani Group entities. The officers of MZU visited offices of the following

group entities of the Adani Group in Ahmedabad office on or about 25-09-2013, in an

attempt to procure OEM/actual supplier documentation with EIF under the

reasonable belief that such documents would be stored in the said offices. Shri Nayan

Rao, Vice President, Corporate Affairs, of the Adani Group voluntarily came forward

and agreed to co-operate with the officers during the course of their visit by supplying

the documents required by DRI. During the course of their visit, the officers visited

the following premises accompanied by Shri Nayan Rao, Vice President of the Adani

Group and directed him to produce specific documents required by them in exercise of

the power conferred by Section 107 of the Customs Act, 1962:-

i) M/s Adani Power Limited, Achalraj Building, Ahmedabad

ii) M/s Adani Enterprises, Adani House

iii) M/s Adani Enterprises, Shikhar Building

iv) Adani Group’s server room, Fortune House.

5.2 Certain documents/electronic data as specified in the visit report dated

25-09-2013, (RUD/C-8) were handed over by Shri Nayan Rao, Vice President, in co-

ordination and consultation with concerned officials at the above offices, to the officers

of DRI during the course of their visit, in response to the requisition under Section 107

of the Customs Act, 1962. However, documents pertaining to transactions between

EIF and one or more overseas based OEMs/actual suppliers and other entities, in the

form of OEM/actual supplier invoices and/or copies of agreements/contracts between

the OEM and EIF were not produced on the ground of non-availability.

5.3 Summons bearing F.No. DRI/MZU/C.I.-224/2013 (RUD/C-4) under

Section 108 of the Customs Act, 1962 was issued in the name of Shri Jatin Shah, who

is described variously as authorised signatory, Manager, Chief Financial Officer and

Director of EIF, to his known addresses, seeking his presence on 14-10-2013 to give

evidence and produce specific documents listed at Annexure A to the said summons,

relevant extracts of which are produced below :-

1. Self attested copies of all the agreements/contracts entered into with

various overseas based original equipment manufacturers/entities/firms

for sourcing of goods of foreign origin from them for eventual supply/sale

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to M/s PMC Projects (I) Pvt. Ltd, India and/or one or more firms of the

Adani Group based in India.

2. Self attested copies of the invoices raised on your firm (M/s Electrogen

Infra FZE), by overseas firms/entities in respect of goods supplied/to be

supplied to M/s PMC Projects (I) Pvt. Ltd, India and/or one or more firms

of the Adani group based in India.

3. Details of the payments made to various foreign firms/entities against

procurements from them invoice-wise in respect of goods eventually

supplied to M/s PMC Projects (I) Pvt. Ltd, India and/or one or more firms

of the Adani group based in India

4. Name and address of the bank and branch through which

remittances/payments referred to at sr. no. 3 were made.

5.4 M/s Electrogen Infra FZE, UAE, vide a letter bearing reference no. NIL

dated 11-10-2013 (RUD-D/61)forwarded by FAX, responded in acknowledgement of

the summons stating that Shri Jatin Shah was on his annual leave and they would

revert on his return.

5.5 Another summons was issued under F.No. DRI/MZU/C.I.-224/2013

dated 15-10-2010, (RUD-C/4) under Section 108 of the Customs Act, 1962 seeking

his presence on 28-10-2013 to give evidence and produce specific documents as per

Annexure A to the summons. Summonses under Section 108 of the Customs Act,

1962 were also issued in the names of the two Indian nationals Shri Mitesh Dani and

Shri Mehul Jani, who appeared to be working for EIF in the UAE, seeking their

appearance on 29-10-2013 and 30-10-2013 (RUD-C/9),respectively, with documents

in respect of the activities of EIF.

5.6 EIF in its response dated 28-10-2013 (RUD/D-62), sent via Fax,

acknowledged the summons issued in the names of three of its employees viz. Shri

Jatin Shah, Shri Mitesh Dani and Shri Mehul Jani. As per the letter, Shri Jatin Shah,

who was claimed to be aware of the matter, was stated to be on leave. The letter

further stated that he was expected to join duty by the end of November 2013 and that

they would revert accordingly.

5.7 Since none of the employees of EIF responded to the summons seeking

their appearances on various dates, summons bearing F.No. DRI/MZU/CI-224/2013

under Section 108 of the Customs Act, 1962 was issued in the name of Shri Vinod

Shantilal Shah, (sole shareholder and Director of the parent company of EIF viz. M/s

Electrogen Infra Holding Pvt. Ltd. and promoter shareholder in Adani Enterprises

Limited) to his known addresses seeking his presence on 11-11-2013 (RUD/C-10)with

specific information/documents listed at Annexure A to the said summons. Details of

the information/documents sought from him at Annexure A is identical to the

information sought from Shri Jatin Shah and other employees of EIF in Annexure A

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annexed to the summons issued to them, relevant contents of which are as

reproduced at para 5.3 above.

5.8 In response to the summons, Shri Vinod Shantilal Shah forwarded a

letter dated 11-11-2013 (RUD-D/63) by fax. In the said response, he stated that he

was neither a Director nor a Shareholder of the said company i.e.EIF at any point of

time. He further stated that he was the Director in Electrogen Infra Holdings Pvt. Ltd,

Mauritius, (holding company of EIF ) for the period from January, 2010 to May, 2011;

that as a director of the parent company, he was not involved in the business of EIF or

day to day operations thereof. In view of these submissions, he further stated that he

did not have access to the records of EIFand that he would not be in a position to

submit/furnish/provide the details/documents sought by DRI. He concluded the

letter by making a request to withdraw the summons issue in his name.

5.9 In view of his response, another summons bearing F.No. DRI/MZU/CI-

225/2013 dated 11-11-2013 (RUD-C/10) was issued to Shri Vinod Shantilal Shah

seeking his presence on 18-11-2013. He was informed that he had been empowered to

sign any documents for and on behalf of EIF as per Resolution passed the Board of

Directors of EIFon or about 19-05-2011. It was accordingly conveyed that by virtue of

the said resolved capacity as ‘Authorized Signatory’ for EIF, he was liable to honour

the summons by appearing on the designated date and time with the

information/documents requisitioned from him.

5.10 In response thereto, Shri Vinod Shantilal Shah while acknowledging

receipt of the said summons, inter-alia, conveyed vide his letter dated 18-11-2013

(RUD/D-64), that he had ceased to be the Director of M/s Electrogen Infra Holding

Pvt. Ltd., Mauritius (parent company of EIF) more than two years ago; that he,

therefore, was not in possession of the documents required by DRI, and that he had

noticed that the DRI had directly written to EIFalso for providing necessary

documents/information. With regard to the Board Resolution, he stated that since he

did not have access to the records of EIF, he was not aware about which Resolution

the DRI was referring to. He requested for being provided with a copy of the resolution

to enable him to revert.

5.11 From his response, it was observed that Shri Vinod Shantilal Shah did

not produce any evidence to refute the documented fact that he had been empowered

to sign any documents for and on behalf of EIFas per Resolution passed the Board of

Directors of EIFon or about 19-05-2011, Under the circumstances, and in view of his

resolved capacity as Authorized Signatory for and on behalf of EIF it appeared that he

was liable to honor the summons issued by the DRI. Accordingly, while conveying

these aspects to him, another summons bearing F.No. DRI/MZU/CI-224/2013 dated

20-11-2013 (RUD/C-10) was issued seeking his presence on 27-11-2013 with specific

information/documents which were specified at Annexure A to the summons. Since

Shri Vinod Shantilal Shah failed to appear on the designated date and time, yet

another summons bearing DRI/MZU/CI-224/2013 dated 29-11-2013, (RUD/C-10)

seeking his presence on 09-12-2013 was issued.In a letter bearing reference no. Nil

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dated 05-12-2013 (RUD/D-65), received via Fax, Shri Vinod Shantilal Shah, while

acknowledging the receipt of both the summonses dated 20-11-2013 and 29-11-2013,

stated that he had forwarded the said summonses to EIF and that the DRI should deal

with the said company directly. In the letter, he reiterated the stand taken by him in

his letter dated 11-11-2013, stating that he was not in possession of any of the

requisitioned documents. He requested that the matter may be taken up directly with

the company and that DRI should not send any further correspondence to him.

5.12 In response to the summons issued to Shri Jatin Shah, Shri MiteshDani

and Shri MehulJani of EIF on 20-11-2013 and 29-11-2013, Shri Jatin Shah forwarded

a letter dated 09-12-2013 (RUD/D-66), by fax. In context of the information sought

from each of them under the summons, he submitted, inter-alia, that EIF owned by

Electrogen Infra Holdings Pvt. Ltd., Mauritius, was a free zone establishment with

limited liability based in Sharjah Airport International Free Zone and that they had

been advised by local lawyers in the UAE that parting with any of the

information/details/documents to authorities outside UAE would constitute breach of

the UAE laws. He concluded by stating that since the information/documents sought

by the DRI contained highly confidential commercial/business information, EIFwould

not be able to part with any such information/details/documents.

5.13 Summons under section 108 of the Customs Act, 1962 were again issued

to Shri Vinod Shantilal Adani and Shri Jatin Shah on 10-12-2013 (RUD/C-10 & C-4)

seeking their presence on 17-12-2013. Summons were also issued on the same day i.e

10-12-2013 in the name of Shri Mitesh Dani and Shri Mehul Jani, seeking their

presence on 18-12-2013. (RUD-C/9) Since they failed to present themselves and join

the investigation, fresh summons were issued to Shri Vinod Shantilal Adani and Shri

Jatin Shah on 20-12-2013 (RUD/C-10 & C-4) seeking their presence on 27-12-2013

and to Shri Shri Mitesh Dani and Shri Mehul Jani on 20-12-2013, seeking their

presence on 30-12-2013 (RUD/C-9).

5.14 A summary of the summons issued from time to time to Shri Vinod

Shantilal Shah and employees of EIFis tabulated below :-

Table-14 A

List of summonses issued to officials of M/s Electrogen Infra FZE, UAE

S.No

Name of official of Electrogen Infra FZE, UAE summoned

F.No. under which summons issued

Date of issue of summonses and designated date for remaining present with information/documents requisitioned

1. Shri Vinod Shantilal Shah

F.No.DRI/MZU/C.I.-224/2013 30-10-2013 for appearance on 11-11-2013 11-11-2013 for appearance on 18-11-2013 20-11-2013 for appearance on 27-11-2013

29-11-2013 for appearance on 09-12-2013 10-12-2013 for appearance on 17-12-2013 20-12-2013 for appearance on 27-12-2013

2. Shri Jatin Shah F.No.DRI/MZU/C.I.-224/2013 30-04-2013 for appearance on 06-05-2013


20-11-2013 for appearance on 27-11-2013 29-11-2013 for appearance on 09-12-2013 10-12-2013 for appearance on 17-12-2013 20-12-2013 for appearance on 27-12-2013

3. Shri Mitesh Dani F.No.DRI/MZU/C.I.-224/2013 15-10-2013 for appearance on 28-10-2013

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11-11-2013 for appearance on 19-11-2013 20-11-2013 for appearance on 28-11-2013


4. Shri Mehul Jani F.No.DRI/MZU/C.I.-224/2013 15-10-2013 for appearance on 28-10-2013 11-11-2013 for appearance on 19-11-2013 20-11-2013 for appearance on 28-11-2013 29-11-2013 for appearance on 10-12-2013

10-12-2013 for appearance on 18-12-2013 20-12-2013 for appearance on 30-12-2013

5.15 Despite repeated summons, the aforesaid persons failed to present

themselves to join investigations and also failed to furnish information/documents

that were requisitioned from them, on one plea or the other.

5.16 Investigations revealed that Vinod Shantilal Shahis another name of

Vinod Shantilal Adani (one of the promoter and shareholders in flagship company of

the Adani group viz. M/s Adani Enterprises Ltd.) as is evident from contents of copy of

a letter dated September 13, 2012 (RUD/D-67) addressed to, inter-alia, the Bombay

Stock Exchange Limited and the National Stock Exchange of India Limited regarding

disclosure under Regulation 31 of the SEBI (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011. The said letter and its annexure have been signed by

Shri Vinod Shantilal Adani clearly stating, inter-alia, that Vinod Shantilal Adani is

also known as Vinod Shantilal Shah. Scanned image of the said letter and

disclosure page is reproduced below :-

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5.17 It is further gathered that Shri Vinod Shantilal Adani, is one of the five

sons of Late Shri Shantilal Adani, his other brothers being Shri Mahasukhbhai S.

Adani, Shri Vasantbhai S. Adani, Shri Gautambhai S.Adani, and Shri Rajeshbhai S.

Adani. Each of the brothers of the Adani family holdssubstantial stake in the flagship

company of the Adani Group i.e M/s Adani Enterprises Limited.

6.1 Scrutiny of the signatories to Agreement no. 700003 between EIF and

HHICL dated 05-10-2010also revealed that the Agreement had been signed by,

inetralia,Shri Dharmesh Parekhfor and on behalf of EIF. An enquiry into his personal

details revealed that the said Shri Dharmesh Parekh was working in the capacity of a

Senior Manager with PMC at Ahmedabad.

6.2 Accordingly,Shri Dharmesh Arvindbhai Parekh, Senior Manager of M/s

PMC Projects (India) Private Limited, was summoned and his statement was recorded

under Section 108 of the Customs Act, 1962 on 10-12-2013(RUD-S/1).

6.2.1 In his statement he,inter-alia, stated that he joined a company named

M/s Adani Energy Limited in the year 2005 in the capacity of Assistant Manager

(Finance and Accounts) where he worked for about three years until 2008; that by the

timehe left, he had been elevated to the level of Deputy Manager (Finance and

Accounts).

6.2.2 He further stated that he joined M/s PMC Projects India Private Limited

in the year 2008 as Deputy Manager (Finance and Accounts); that at the material

time, he was still with M/s PMC Projects India Private Limited, working there in the

capacity of Senior Manager (Finance and Accounts); that as Senior Manager (Finance

and Accounts), he was responsible for maintenance of accounts for the Tiroda Project;

that their company (PMC Projects India Private Limited) was into two types of work viz.

Project Management &Consultancy services and execution of Engineering,

Procurement and Commissioning (EPC) contracts; that M/s PMC Projects India Private

Limited was engaged in handling the Tiroda thermal power project (5 x 660 MW) as a

part of Project management and consultancy services. He further divulged that they

(PMC) had been awarded a contract by M/s Powergen Infrastructure LLC, Dubai for

execution of Tiroda power project. In terms of Board Resolution passed by M/s

Powergen Infrastructure LLC, Dubai, he had been authorised to represent and sign on

behalf of the said Dubai based firm. During the course of the said statement, he

undertook to produce a copy of the said Board Resolution within a week’s time.

6.2.3 He further divulged that as a part of execution, the company provided

management and consultancy services for procurement of Balance of Plant (BOP)

supply, Balance of Plant (BOP) services and Boiler Turbine Generator (BTG) services.

He further stated that he reported to Shri Jaydev Mishra who was the Deputy General

Manager at M/s PMC Projects India Private Limited.

6.2.4 On being specifically questioned regarding details of his travel abroad, he

stated that he never travelled out of India at any point of time till date, though

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he held a passport issued to him by the Ahmedabad Passport office. He undertook to

produce a photo-copy of all the pages of his passport within a week’s time.

6.2.5 On being specifically questioned whether he had been a signatory to any

contracts/agreements/like documents on behalf of M/s PMC Projects, he stated that

he had never signed any Contract and/ or Agreement or any like documents on behalf

of M/s PMC Projects India Private Limited or any other firm/entity of the Adani group

or any overseas firm/entity, supplier or vendor barring the signatures made by him for

and on behalf of M/s Powergen Infrastructure LLC, Dubai.

6.2.6 During the course of his statement he was questioned if he had been

authorised to discharge responsibility on behalf of any other firm/entity other than

M/s PMC Projects India Private Limited at any point of time. He was also questioned if

he had been in possession of any such authority during his employment with M/s

PMC Project India Private Limited. In response thereof, Shri Dharmesh Arvind Parekh

stated that he had never been authorised to discharge responsibility on behalf of any

other firm/entity other than M/s PMC Projects India Private Limited at any point of

time and that he had never been in possession of any such authority during his

employment with M/s PMC Project India Private Limited.

6.2.7 During the course of his statement, he was asked to peruse a copy of the

Agreement bearing No. 700003 dated 05-10-2010 between EIF, a firm having its

registered office in the Sharjah, UAE and M/s Hyundai Heavy Industries Co. Ltd.,

having registered office at Seoul in South Korea. Upon perusal thereof, he was

requested to confirm whether the signature appended at page 4 of the Agreement

happened to be his signature. He was also specifically asked if he had signed the said

Agreement for and on behalf of EIF. Pursuant to perusal of contents of Agreement

no. 700003 between EIFand M/s Hyundai Heavy Industries Co. Ltd, South Korea,

shown to him, he confirmed that the signature appearing at page 4 belonged to

him and he had indeed signed the said Agreement. He also admitted to have put

his initials on every page at the place of the Agreement and its schedules, where-

ever the round seal of EIF was found affixed.

6.2.8 He put his dated signatures as well as his initials on every page of the

Agreement including its Schedule 1, Schedule 1A, Schedule 1B and Schedule 1C in

token of having carefully perused the signatures and initials appearing thereon. He

also put his dated signatures and initials on a copy of the bare Agreement no. 700003

running into five pages, which bears the original stamp/seal of Axis Bank, DIFC

Branch, Dubai and signature of the authorised official of the Bank.

6.2.9 On being questioned about the reason and the authority for having

signedAgreement no. 700003, for and on behalf of EIF, he stated that at the material

juncture, he was unable to recollect the circumstances under which he had signed to

the said Agreement bearing number 700003 between EIFand M/s Hyundai Heavy

Industries Co. Ltd, South Korea. He, however promised to revert within a week’s time

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and explain the reason as well as the circumstances for having signed the aforesaid

Agreement.

7.1 Vide letter bearing F.No.DRI/MZU/CI-224/2013 dated 20-12-2013

(RUD/C-11), a request was made to the Adani Group for submission of self-attested

copies of the Memorandum of Association and the Articles of Association together with

self-attested copies of the Balance Sheets with all theirSchedules and appendices for

the last three financial years in respect of select Adani Group entities including M/s

PMC Projects (India) Private Limited.

7.2 PMC,inter-alia, responded by providing the requisitioned details vide

their letter dated 08-01-2014(RUD-D/68).From scrutiny of the documents submitted,

it appeared that initially M/s Project Monitoring Construction Limited, situated at 44,

St. George Street, Port Louis, Republic of Mauritius held the shares of PMC Projects

(India) Private Limited as of 27th April 2005. Subsequently, as per information

declared in the financial statements for the year ending 31-03-2013, it appeared that

M/s PMC Projects (India) Private Limited was a wholly owned subsidiary of M/s PMC

Infra Limited (formerly known as M/s Gudami International (Mauritius) Limited. Since

no details were available with regard to the constitution and ownership of the holding

companyi.e M/s PMC Infra Limited, Mauritius, summons under Section 108 was

issued in the name Shri Mayur Shah, Finance Controller of M/s PMC Projects (India)

Private Limited seeking his presence for submission of Memorandum and Articles of

Association of the holding company of PMC i.e M/s Project Monitoring Construction

Limited, Republic of Mauritius subsequently known as PMC Infra Limited. Summons

under Section 108 was also issued in the name of Shri Dharmesh Parekh, Senior

Manager of M/s PMC Projects (India) Private Limited, who had failed to provide

information/documents as undertaken by him in his statement recorded on 10-12-

2013.(Para 6.2)

8.1 Shri Mayur Shah failed to appear on 03-02-2014 in response to the

summons and, therefore, another summons seeking his appearance on 13-02-2014

was issued in his name to produce documentation relating to the holding company of

M/s PMC Projects (India) Private Limited in response to which he appeared before this

office on the designated date.

8.1.1 In his statement recorded under Section 108 of the Customs Act, 1962,

on 13-02-2014(RUD-S/2), Shri MayurKiritkumar Shah,inter-alia, stated that he was a

qualified Chartered Accountant; that he joined M/s PMC Projects (India) Private

Limited, a foreign subsidiary owned by M/s PMC Infra Mauritius in February 2008,

that he joined the company as an Assistant Vice President; that he was responsible for

accounting and port related projects; that he worked with M/s PMC Projects (India)

Private Limited till August 2012 and that when he left, he held the position of

Associate Vice President.

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8.1.2 He,inter-alia, stated that he joined the Adani Group in September 2012

in their company Adani Ports and SEZ Limited as Associate Vice President and that he

was responsible for the company’s initiative for process transformation and IT

automation.On being asked about his inability to honor the earlier summons issued to

him requiring his presence on 3rd February 2014, he admitted to having failed to

honour the said summons. He also admitted to having failed to communicate or

convey any reasons for his inability to honour the summons.

8.1.3 On being asked to produce the information/documents called for under

the summons dated 07-02-2014, he responded by stating that he had requested Shri

Kumar Vikram, Director of M/s PMC Projects (I) Pvt. Ltd and since Shri Kumar Vikram

had expressed his inability to provide the requisitioned documents, he in turn has not

been in a position to provide the requisitioned documents.

8.1.4 On being asked about the parent company of M/s PMC Projects (I) Pvt.

Ltd., he deposed that PMC Projects (I) Pvt. Ltd was a 100% subsidiary of M/s PMC

Infra Limited, Mauritius. On being asked about the transmission project undertaken

by M/s PMC Projects (I) Pvt Ltd., he explained that PMC Projects (I) Pvt. Ltd. had

bagged a tender floated by Maharashtra Eastern Gujarat Power Transmission

Company Ltd. (MEGPTCL)., a wholly owned subsidiary of M/s Adani Enterprises,

under the International Competitive Bidding process for development of two

transmission lines in the corridor of Tiroda-Koradi-Akola-Aurangabad, as an

Engineering, Procurement, Construction (EPC) Contractor.

8.1.5 He further deposed that M/s PMC Projects (I) Pvt. Ltd., for execution of

the said contract, appointed contractors and placed orders for procurement of

materials and services including supply of offshore equipments (imported equipments);

that for the import of offshore equipments, orders were placed with EIF through

nomination basis on the directions of the then Director and CEO, Shri Arvind

Uplenchwar.

8.1.6 He further stated that PMC received transferable Letters of Credit (LC)

opened by State Bank of India, Ahmedabad Branch, covering supply of imported goods

for the transmission line project; that the applicant was MEGPTCL and the Letters of

Credit had been opened in favour of PMC in foreign currency i.e in US Dollars. On

being further asked to specify the contractual terms under which M/s MEGPTCL

opened the Letters of Credit in foreign currency (USD) in favour of PMC, in the light of

the fact that both these were local Indian companies, he assured to revert with

complete details on 17-02-2014.

8.1.7 On being questioned regarding the financing of the said project by M/s

PMC Projects (I) Pvt. Ltd., while stating that the setting up of the project involved both

imported as well as indigenous sourcing of goods and services, he disclosed that M/s

PMC Projects (I) Pvt. Ltd. had not raised any funds for the said project. He further

explained that as and when the supply was to take place from the supplier for

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imported equipments, PMC received transferable LCs in USD from MEGPTCL, which

were transferred in favour EIF.

8.1.8 On being specifically asked, regarding the possibility of any consortium

partner of M/s PMC Project (I) Pvt. Ltd. for supply of imported components for the said

transmission line project, he responded by stating that EIFwas the consortium partner

for supply of imported equipments. On being specifically asked to re-confirm whether

EIFhad jointly made a bid to MEGPTCL alongwith PMC as an EPC consortium partner

or as a consortium partner for supply of imported equipments, he stated that he

would revert with the correct position on 17-02-2014. On being further specifically

asked if EIFwas a consortium partner, and whether there was any consortium

agreement existing between PMC and EIFhe stated that a consortium agreement

between the PMC and other consortium partners had been executed and was in

existence. He undertook to produce a self-attested copy of the said consortium

agreement on 17-02-2014.

8.1.9 In view his deposition that a consortium agreement had been executed,

he was questioned about the need and reasons for having executed a separate

Agreement between PMC and EIFto supply imported equipments to MEGPTCL. In

response thereof, he expressed his inability to answer and stated that Shri Jaidev

Mishra would be able to provide an answer to the said query.

8.1.10 On being questionedwhether he had been privy to the supply

agreements and/or consortium agreements in the backdrop of the fact that he had

been authorised by M/s PMC Projects (I) Pvt. Ltd. to open Letters of Credit in favour of

EIFfor supply of imported equipments to the transmission line project, he deposed

that he had not been privy to the supply agreements and/or consortium agreements

and that applications for the LCs signed/made by him had been done on the

instructions of Shri Jaydev Mishra, who was stated to be aware of the modalities of the

purchase agreement.

8.1.11 On being asked tore-confirm that he had signed bank documents

associated with application/opening of the LCs in favour of EIFon behalf of PMC,as an

applicant, without looking into the basic documents such as contract / consortium

agreement / purchase order involving these parties, he stated that he did not recollect

having signed any bank documents associated with application/opening of the LC in

favour of EIFon behalf of PMC as an applicant.

8.1.12 Under the circumstances of Shri Mayur Shah not being

awareabout the value of supply of individual equipments nor being aware of the

contents of the purchase order/ contract/consortium agreement, he was to explain

the basis for indicating the value at the time of application /opening of LCs, to which

he reiterated stating that he had never signed any application or documents for

opening of the LCs.

8.1.13 In his capacity of beinghead of the finance department, he was

asked to confirm whether LC opening application was processed by the department

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under his charge and whether he had been privy to any LC applications in any

manner,heresponded by stating that the LC applications were processed by his

department but he was not privy to the LC applications. He requested for permission

to leave on the undertaking that he would appear on 17-02-2014 to continue with his

statement.

8.2 Shri Mayur Shah appeared on 17-02-2014 as undertaken and his

further statement was recorded under Section 108 of the Customs Act, 1962 (RUD-

S/3).

8.2.1 During his statement he produced a notarised copy of the Consortium

Agreement dated 16th August 2010 between PMC, EIFand M/s Hyundai Heavy

Industries Co. Ltd for tender specification no. MEGPTCL/765 KV ^ 400 KV

SS/EPC/02 which he tendered under his dated signature. He also produced a

notarised copy of the document titled ‘Power of Attorney for Lead Member’ executed

and signed on 16-08-2010 by PMC , EIFand M/s Hyundai Heavy Industries Co. Ltd.

He undertook to produce the original in their possession within a week’s time.

8.2.2 On being asked to identify the signatory for and on behalf of EIF who

had signed the ‘Consortium Agreement’ and ‘Power of Attorney for Lead

Member’, he confirmed that the signatures thereon belonged to Shri Dharmesh

Parekh, Senior Manager of PMC, who had signed as an authorized signatory for

EIF.

8.2.3 During the course of his statement, he was asked to go through a copy of

an agreement No. 700003 dated 5th October 2010 between EIFand M/s Hyundai

Heavy Industries Co. Ltd., South Korea for transformers, shunt reactors & other

equipments. After having done so, he was requested to identify and confirm the

person who has signed the said agreement as signatory on behalf of EIF. He was also

requested to specify the project for which the said agreement had been executed. In

response thereof Shri Mayur Shah perused copy of the Agreement between EIFand

M/s Hyundai Heavy Industries Co. Ltd. , South Korea, shown to him. He endorsed his

dated signature on each page of the Agreement in token of having read and having

perused its contents.

8.2.4 He, thereafter, proceeded to explain that the said Agreement was for the

transmission line project in the corridor of Tiroda-Koradi-Akola-Aurangabad for which

contract had been awarded to PMC by M/s MEGPTCL. After careful perusal of the

schedule to the above Agreement, he confirmed that the scope of supply of equipments

and technical specifications thereof for the transmission line project of Tiroda-

Koradi-Akola-Aurangabad as covered in the schedule to the said Agreement was the

same as covered in the Agreement between EIFand PMC in so far as it related to the

supply of transformers and shunt reactors (excluding the supply of OPGW cables and

Disc Insulators). After a careful perusal of the signatory to the said Agreement, he

confirmed that his subordinate Shri Dharmesh Parekh had signed the Agreement

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no. 700003 dated 05-10-2010 for and on behalf of EIFin the capacity of an

authorized signatory.

8.2.5 During the course of his statement, he was shown seven print-outs

containing tabulated charts. These charts,inter-alia, contained details of the

consignments imported by PMC from EIF, where back-to-back OEM invoices raised by

the four OEMs on EIFwere available. The prices appearing in the OEM invoices were

tabulated against individual bills of entry for 57 consignments imported and cleared

by PMC on the strength of inflated invoices raised by EIF. He was asked to go through

tabulated data in the seven pages which reflected details of 57 consignments shipped

by variousOEMs which had been imported by PMC on the strength of invoices raised

by EIF. He was also shown photo copies of the Bills of Lading and the invoices of the

respective OEMs as detailed at columns 6 and 9 of the tabulated sheets, alongwith

their respective packing lists, individually for each of the 57 consignments. After

goingthrough the tabulated data in the seven sheets giving details of 57 consignments

shipped by various OEMswhich were said to have been imported by M/s PMC Projects

(I) Pvt. Ltd. on the strength of invoices raised by EIF, he confirmed that the said

consignments had been imported by PMC and had been customs cleared on the

strength of invoices raised by EIF. He proceeded to put his dated signatures on copy of

each bill of lading and invoice of the respective shippers i.e. M/s Hyundai Heavy

Industries Co. Ltd., South Korea; Sediver Insulators (Shanghai) Co. Ltd., China;

Suzhou Furukawa Power Optic Cable Co. Ltd. , China; and Dalian Insulator Group Co

Ltd. China, details of which were appearing at column no. (6) and (9) of the tabulated

charts and also on the corresponding packing lists after comparing particulars as

appearing therein with the details mentioned in the tabulated sheet in token of having

carefully perused relevant contents thereof. He also put his dated signature on copy

of the Agreement bearing no. 700003.

9.0 Statement of Shri Jaydev Ramdatt Mishra, Associate General Manager, of

M/s PMC Projects (India) Private Limited, was recorded under Section 108 of the

Customs Act, 1962 on 17-02-2014(RUD-S/4).

9.1 In his statement, he,inter-alia, stated that he joined the Adani Group in

their company M/s Adani Power Limited as a Manager in the year 2007; that as a

Manager, he used to handle contracting work relating to various projects to be

executed by M/s Adani Power Limited and that he had handled work relating to

Mundra Project.

9.2 He further stated that sometime in the year 2008 end, he joined the

company M/s PMC Projects (I) Pvt. Ltd as a Senior Manager; that he was responsible

for contracting work i.e contracts and contract management which included

identifying overseas suppliers, formulation and signing of various contracts for

projects to be executed by M/s PMC Projects (I) Private Limited and monitoring the

execution of such projects to the extent of sourcing of equipments and machinery

required to execute such projects; that at the material time when he joined the

company, two persons by name Shri A.M.Uplenchwar and Shri Vinod George were the

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Directors; that he was promoted as Deputy General Manager and, thereafter, as

Associate General Manager; that he was presently working as an Associate General

Manager; that the company was engaged in setting up two transmission lines in the

corridor of Tiroda-Koradi-Akola-Aurangabad for which it has been awarded a turnkey

contract by M/s Maharashtra Eastern Grid Power Transmission Company Limited

(MEGPTCL); that orders for sourcing all the imported goods for the transmission line

project were placed on a company named EIFfor which M/s PMC Projects (I) Pvt. Ltd.

entered into agreement in respect of equipments for sub-stations; that some of the

imported equipments were also to be procured from M/s ABB Limited for which they

had entered into a separate contract with them; that he was associated with

formulation and execution of agreements with M/s Electrogen Infra FZE, UAE and

M/s ABB Limited; that he was also a signatory for these agreements on behalf of M/s

PMC Projects (I) Pvt. Ltd.

9.3 On being specifically questioned regarding Shri Dharmesh Parekh, he

stated that Shri Dharmesh Parekh was the Senior Manager of M/s PMC Projects (I)

Pvt. Ltd. and was presently working with them; that he knew Dharmesh Parekh as an

employee of M/s PMC Projects (I) Pvt. Ltd. since the year 2008 and that Shri

Dharmesh Parekh used to report to him.

9.4 On being asked to explain whether Shri Dharmesh Parekh had the

authority or power to sign documents/agreements/contracts on behalf of various

companies including foreign entities in the background of local Indian laws of

employment, he stated that he was not aware whether Shri Dharmesh Parekh had any

authority or power to sign on behalf of various companies including foreign entities.

9.5 On being asked about the parent holding company of M/s PMC Projects

(I) Pvt. Ltd., its structure and composition, he had to state that M/s PMC Infra

Limited, based in Mauritius, was at the material time their parent company. He

admitted that he was not aware of the structure or composition of M/s PMC Infra

Limited even though he held a responsible position.

9.6 On being asked whether he had signed any documents/agreements or

contracts for or on behalf of PMC, he stated that he had not signed any documents on

their behalf. On being asked whether he held any power of attorney or the status of

authorized signatory for any other company, he stated that he had never held power of

attorney nor was he the authorized signatory for any other company (other than PMC )

at any point of time during his tenure with PMC. On being specifically asked about

any power of attorney or authorization for or on behalf of MEGPCTL, including any

banking documents, he stated that he never held power of attorney nor was he the

authorized signatory for any other company (other than PMC) at any point of time

during his tenure with PMC.

9.7 During the course of his statement, he was shown a copy of Agreement

No. 700003 dated 5th October 2010 between EIFand M/s Hyundai Heavy Industries

Co. Ltd. , South Korea for supply of transformers, shunt reactors & other equipments.

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He was requested to identify and confirm the name of the person who has signed the

said Agreement as signatory on behalf of M/s Electrogen Infra FZE, UAE. He was also

requested to specify the project for which the said Agreement had been executed. After

perusing the copy of Agreement shown to him during the course of his statement, he

endorsed his dated signature on each page of the said agreement shown to him, in

token of having read and having perused its contents. He explained that the said

Agreement was for the transmission line project in the corridor of Tiroda-Koradi-Akola-

Aurangabad for which contract had been awarded to M/s PMC Projects (India) Private

Limited by M/s MEGPTCL for which he had been a signatory.

9.8 After careful perusal of the schedule to the above Agreement, he

confirmed that the scope of supply of equipments and technical specifications thereof

for the transmission line project of Tiroda-Koradi-Akola-Aurangabad as covered in the

schedule to the said Agreement was the same as covered in the Agreement between

EIFand M/s PMC Projects (I) Pvt. Ltd. in so far as it related to the supply of

transformers and shunt reactors (excluding the supply of OPGW cables and Disc

Insulators). After careful perusal of the signatory to the said Agreement, he

confirmed that his subordinate Shri Dharmesh Parekh had signed the Agreement

no. 700003 dated 05-10-2010 for and on behalf of EIFin capacity of an

authorized signatory.

9.9 During the course of his statement, he was shown seven print-outs

containing tabulated charts, which had been shown to Shri Mayur Shah, during the

course of his statement on the same day (para 8.2). He was asked to go

throughtabulated data in the seven pages which reflected details of 57 consignments

shipped by various OEMs which had been imported by M/s PMC Projects (I) Pvt. Ltd.

on the strength of invoices raised by EIF. He was also shown photo copies of the bills

of lading and the invoices of the respective OEMs as detailed at columns 6 and 9 of the

tabulated sheets alongwith their respective packing lists, individually for each of the

57 consignments. After goingthrough the tabulated data in the seven sheets giving

details of 57 consignments shipped by various OEMs which were imported by PMC on

the strength of invoices raised by EIF, he confirmed that the said consignments had

been imported by PMC and had been customs cleared on the strength of invoices

raised by EIF. He proceeded to put his dated signatures on copies of each bill of lading

and invoice of the respective shippers i.e. M/s Hyundai Heavy Industries Co. Ltd.,

South Korea; Sediver Insulators (Shanghai) Co. Ltd., China; Suzhou Furukawa Power

Optic Cable Co. Ltd. , China and ; Dalian Insulator Group Co Ltd. China, details of

which were appearing at column no. (6) and (9) of the tabulated charts and also on the

corresponding packing lists after comparing particulars as appearing therein with the

details mentioned in the tabulated sheets in token of havingcarefully perused relevant

contents thereof. He also put his dated signature on the copy of the Agreement

bearing no. 700003.

10.0 Another statement of Shri Dharmesh Arvindbhai Parekh was recorded

under Section 108 of the Customs Act, 1962 on 28-02-2014(RUD-S/5).

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10.1 He was specifically asked to state whether he had signed any documents

in the nature of Contracts/Deeds/Agreements/Power of Attorney/Purchase Orders or

like documents for and on behalf of EIFas an authorised signatory, at any point of

time in his employment with M/s PMC Projects (I) Private Limited. Shri Dharmesh

Parekh stated that besides, the Agreement No. 700003 dated 05-10-2010

between EIF and M/s Hyundai Heavy Industries Co. Ltd., to which he had been a

signatory for and on behalf of EIF, he had also been a signatory to additional

documents which he described as under :-

i) Consortium Agreement dated 16-10-2010 executed by and between

PMC,EIF and M/s Hyundai Heavy Industries Co. Ltd., in relation to the

transmission line project awarded to his company (PMC Projects) by M/s

Maharashtra Eastern Grid Power Transmission Company Limited

(MEGPTCL) involving sourcing of imported capital equipment/goods i.e

auto transformers, shunt reactors etc. from Hyundai Heavy Industries

Co. Ltd. for supply to their company (PMC) through EIF.

ii) Power of Attorney for Lead Member executed by and between EIF, M/s

Hyundai Heavy Industries Co. Ltd., South Korea and PMC as Lead

Member in relation to the aforesaid power transmission project.

He admitted that he had signed the aforesaid documents for and behalf of EIF as an

authorised signatory. He further divulged that in addition to the above documents, he

was also a signatory to Agreements/Contracts executed by and between EIF and

overseas based OEMs viz. Sediver Insulators (Shanghai) Co. Ltd., China; Dalian

Insulator Group Co Ltd. China and Suzhou Furukawa Power Optic Cable Co. Ltd.,

China; in capacity as an authorised signatory for EIF. While the

Agreement/Contracts executed by and between EIF and Sediver Insulators (Shanghai)

Co.. Ltd., China &Dalian Insulator Group Co Ltd. China were for the supply of disc

insulators for eventual supply to their company M/s PMC Projects (I) Private Limited

in relation to the above project, the agreement/contract executed by and between EIF

and M/s Suzhou Furukawa Power Optic Cable Co. Ltd. was for the supply of OPGW

cables and accessories.

10.2 On being asked about the signing/execution of the respective

agreements/contracts and value/consideration amount agreed for supply between the

parties, he stated that he had been a signatory to each of these agreements for

and on behalf of EIFand that he had signed these documents in India. He further

deposed that at the relevant juncture, he did not recollect the contract/agreement

value/consideration amount for respective agreements. He, however, assured to

confirm the consideration amount by producing photo-copies of each such agreement

which he had signed for and on behalf of EIF as an authorised signatory within ten

days.

10.3 During the course of his statement, he was shown photo-copies of the

documents that he had deposed to have signed as above, the contents of which he

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carefully perused including contents of the page which bore the signatures of the

authorised signatories of the respective executing parties. Pursuant to the perusal, he

confirmed that signatures appearing in the two documents for and behalf of M/s

Electrogen Infra FZE, UAE were his signatures. On being specifically asked, he

stated that his superior at PMC Projects (I) Pvt. Ltd. , Shri Jaydev Mishra, AGM

was also a signatory in these documents as an authorised signatory for and on

behalf of M/s PMC Projects (I) Pvt. Limited. He proceeded to put his dated

signatures of each of the aforesaid documents in token of his perusal and

identification.

10.4 On being specifically asked, he stated that apart from the above, he was

also a signatory to Agreement no. 415703 dated 01-10-2010 between PMC and

EIF, in the capacity of an independent witness, i.e as witness no. 1, in token of

having witnessed the signing of the Agreement by Shri Jatin Shah, Director, of EIFwho

has signed for and on behalf of EIF. He produced a copy of the above Agreement

under his dated signature.

10.5 On being asked to explain the authority or authorisation on the basis of

which Shri Dharmesh Parekh had signed documents for and on behalf of EIF, he

produced an authorisation under his dated signature, claimed to have been given to

him by Shri Jatin Shah, Director of EIFauthorizing him (Shri Dharmesh Parekh) to

sign on behalf of EIF. On being specifically asked about receipt of remuneration of any

kind from EIF, he stated that he had not been paid any consideration/remuneration at

any point of time by EIF in response to the signing authority conferred on him.

10.6 He was specifically asked, whether he had informed his employer firm

i.e.PMC before accepting such a signing authority for and on behalf of a foreign entity

i.e. EIF. He was also asked to state on whose directions/instructions he proceeded to

accept such an authorization and if he had informed his superiors, and if so, whom

had he informed. To this, he responded by stating that he did not recollect whom he

had informed within his company and on whose instructions/directions he had

accepted such an authority from a foreign entity. He also stated that he did not recall

if he had informed anybody in his company (PMC) before accepting such an authority

from a foreign company.

11.0 HOLDING COMPANY OF PMC IN MARITIUS

11.1 Perusal of the Notes forming part of the financial statements of PMC for

the years ending 31-03-2012 and 31-03-2013 (RUD-D/69)revealed that PMC Infra

Limited, Mauritius held 100% share capital of PMC as on 31.03.2011 and thereafter.

Since PMC appeared to be a wholly owned subsidiary of the Mauritius based company,

it was decided to obtain basic details such as constitution and share holding pattern

of the Mauritius based holding company from one or more of the officials declared to

be ‘Key Management Personnel’ for PMC.

11.2 Summons under Section 108 of the Customs Act, 1962 was issued to

Col. Vinod George for his appearance in this office on 10-03-2014,(RUD-C/12) since

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his name was found to appear consistently in the financial statements for each of the

three financial years 2010-11, 2011-12 and 2012-13 as ‘Key Management Personnel’

in the context of the Mauritius based holding company M/s PMC Infra Limited

[erstwhile name Gudami International (Mauritius) Limited]. Simultaneously, summons

was also issued in the name of Shri U.V.Phanikumar seeking his appearance on the

same date i.e 10-03-2014, (RUD-C/13)since his name was found to be mentioned as

fresh inclusion (w.e.f. 18-01-2013) in the list of ‘Key Management Personnel’ . Both

these officials were requested to produce Memorandum and the Articles of Association

of M/s PMC Infra Limited (holding company of M/s PMC Projects (India) Private

Limited) and all other relevant information in their respective capacities as “Key

Management Personnel” in the context of the Mauritius based holding company M/s

PMC Infra Limited.

11.3 Both the officials presented themselves on 07-03-2014. It was revealed

that while Col Vinod George (Retired) was the Chief Operating Officer, Dredging and

Reclamation for M/s PMC Projects (India) Private Limited , Shri U.V.Phani Kumar was

the Chief Executive Officer, for PMC Projects (India) Private Limited. Their joint

statement was recorded under Section 108 of the Customs Act, 1962 on 07-03-2014

(RUD-S/6).

11.3.1 During the course of their joint statement, Col. Vinod George

(Retd.) on his part stated,inter-alia, that he had worked as a consultant with M/s

Adani’s Mundra Port for dredging services from 2005 onwards till September 2011;

that thereafter in the same year of 2011, he joined the company named M/s PMC

Projects (India) Limited as a Senior Vice President in Ahmedabad and that he was

presently continuing to serve them (PMC) as on date.

11.3.2 Shri U.V.Phani Kumar on his part,inter-alia, stated that he joined

PMC Projects (India) Limited in January 2013 as Chief Operating Officer; that he was

inducted in the Board of Directors in June 2013 and that he was Chief Executive

Officer, of the company.

11.3.3 On being questioned jointly and severally, about the company

named PMC Infra Limited, they stated that it was a company incorporated in

Mauritius previously known as Gudami International (Mauritius) Limited; that the

current directors of PMC Infra Limited were Mr. Giandeo Reemul, Mr. Theyvarajen

Ponambalum and Mr. Chang Chung Ling and that PMC Infra Limited was the holding

company of M/s PMC Projects (India) Private Limited. They undertook to submit

authentic documents relating to the constitution and share holding pattern of M/s

PMC Infra Limited, Mauritius within five days.

11.3.4 On being further questioned about their role as ‘Key Management

Personnel’ for PMC Infra Limited, Mauritius, specifically declared in all statutory

documents such as Balance Sheets and Schedules thereof, they stated that their

names being Directors in the subsidiary company, had been stated as ‘Key

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Management Personnel’ for PMC Projects (India) Pvt. Ltd. in the statutory documents

i.e Balance Sheets etc.

11.3.5 On being asked to confirmjointly and severally whether they had

any role in PMC Infra Limited, Mauritius as far as its management in Mauritius was

concerned, they jointly and severally confirmed that they had no role in PMC Infra

Limited, Mauritius as far as its management in Mauritius was concerned. On being

further questioned to confirm whether M/s PMC Projects (I) Pvt. Ltd. was the only

subsidiary company of PMC Infra Limited, they responded by stating that they were

not aware whether M/s PMC Projects (I) Pvt. Ltd. was the only subsidiary company of

PMC Infra Limited. They, however, assured to confirm and revert within five days.

11.3.6 On being asked to statejointly and severally, whether M/s PMC

Projects (I) Pvt. Ltd. had given any dividend or royalty or any other payments to the

holding company PMC Infra Limited, Mauritius since its inception, they replied that

they were not aware at that juncture. They assured to confirm and revert within five

days.

11.3.7 On being asked tostate jointly and severally whether any of the

Directors/shareholders of the holding company M/s PMC Infra Limited, Mauritius,

was in the Board of Directors of M/s PMC Projects (I) Pvt. Ltd. or was controlling the

management of M/s PMC Projects (I) Pvt. Ltd., directly or indirectly, Col. Vinod George,

confirmed that there were no nominee Directors on the board of M/s PMC Projects (I)

Pvt. Ltd. since August 2010. Shri U.V.Phani Kumar also confirmed that there were no

nomineeDirectors on the board of M/s PMC Projects (I) Pvt. Ltd. since July 2013. They

stated that the Board of Directors of M/s PMC Projects (I) Private Limited reported to

the Directors of M/s PMC Infra Limited, Mauritius.

11.3.8 On being asked tostate jointly and severally whether the Board of

Directors of M/s PMC Projects (I) Pvt. Ltd. received any written instructions/directions

from the Directors/Board of Directors of M/s PMC Infra Limited, Mauritius, they

responded by stating that the Board of Directors of M/s PMC Projects (I) Pvt. Ltd. did

not receive any written instructions/directions from Directors/Board of Directors of

M/s PMC Infra Limited, Mauritius.

11.3.9 On being further asked to statejointly and severally whether concurrence

of Board of Directors of M/s PMC Infra Limited, Mauritius was sought or obtained

before taking up execution of the two transmission line project in the corridor of

Tiroda-Koradi-Akola-Aurangabad for Maharashtra Eastern Grid Power Transmission

Company Limited (MEGPTCL), they differed in their responses. While Col. Vinod

George, (Retd.) stated that such aspects were being dealt with by Shri

A.M.Uplenchwar, the then CEO, Shri U.V.Phani Kumar stated that he joined the

company only in January 2013. Regarding the concurrence of Board of Directors, they

together stated that the CEO is fully competent to execute such projects without the

concurrence of the Board of Directors of the holding company i.e M/s PMC Infra

Limited.

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12.0 TENDERING PROCESS:

12.1 Documents relating to the tendering process were called for from M/s

MEGPTCL vide letter bearing F.No. DRI/MZU/CI-224/2013/1485 dated 20-02-

2014.(RUD-C/14)

12.2 MEGPTCL, vide their letterbearing Ref :

MEGPTCL/765/DRI/AG/14/02/01 dated 28-02-2014 (RUD-D/70),stated, inter-alia,

that Notice InvitingTender (NIT) was published in three newspapers viz. the Financial

Express, the Business Standard and the Lokmaton 05-08-2010. They further

submitted that the consortium led by PMC Projects (India) Private Limited with EIF

and M/s Hyundai Heavy Industries Co. Ltd had participated in the -NIT No.

MEGPTCL/765 KV & 400 KV SS EPC/02 for substation package (the scope of work at

part B of the Notice Inviting Tender and were awarded the contract having emerged as

the lowest bidder for the sub-station package. However, M/s MEGPTCL failed to

furnish documents pertaining to the bids/offers received by themfrom other bidders

for the sub-station package.

12.3 The documents relating to the tendering process followed by MEGPTCL

for procurement to be made on international competitive bidding, submitted by them,

under their letter dated 28-02-2014 were examined.From perusal of the date of

publication of the NIT in the newspapers and other dates stipulated as timelines in the

NIT, it is noticed that that the date of NIT (05-08-2010) as well as opening dates of

Techno-Commercial bid (06-09-2010 and 07-09-2010) were prior to the date of grant

of Transmission License 1 of 2010dated 21-09-2010.It appears from perusal thereof

that MEGPTCL were aware of the above conditions much prior to issue of the

Transmission Licence i.e prior to 21-09-2010 as is evident from the fact that it

arranged to publish the NIT for International Competitive Bidding in English

newspaper as well as local language newspaper on 05-08-2010, more than a month

prior to grant of the licence. Scanned copy of one such published noticedated 05-08-

2010 inviting tenders is placed below:

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12.4 It further appears from perusal of the above advertisement that two

distinct tenders had been floated under a common NIT as under :-

(i) Tender No. MEGPTCL/765 KV_ 400 KV TL EPC/01 shown at Sr.No. A of

the Notice - (Scope of work involved under the said tender was for

setting up Transmission Lines)

(ii) Tender No. MEGPTCL/765 KV & 400 KV SS EPC/02 shown at Sr.No. B

of the Notice –(Scope of work involved under the said tender was for

setting up Sub-stations and Switchyard.

The scope of work covered by Tender No.- MEGPTCL/765 KV & 400 KV SS EPC/02 at

Part B specifically covers setting up of Sub-stations involving installation of Auto

Transformers and Shunt Reactors for three substations at Tiroda, Koradi III and Akola

II and equipment for Switch Yard (Tiroda) at designated site&Shunt Reactors at

Aurangabad.

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12.5 M/s MEGTPCL, through its letter dated 23-09-2010 bearing No.

AD/MEGPTCL/SS/01 (RUD-D/71),appears to have issued Letter of Intent to the

Consortium of PMC Projects (India) Private Limited, (Lead Member), M/s Hyundai

Heavy Industries Co. Ltd. and EIF (Members of the Consortium) for work relating to

the Sub-station package covered under Part B of the NIT involving setting up of sub-

stations) at a total price of Rs. 1895,88,15,657/-.Upon scrutiny of the documents

submitted by MEGPTCL under its letter dated 28-02-2014, it appears that

information/bid documents contained therein areonly in respect of the bid made by

the Consortium led by M/s PMC Projects (India) Pvt. Ltd. for Part B of the NIT

involving setting up of Sub-stations. MEGPTCL have failed in submitting documents

relating to other bids, if any, received for Part B. It prima-facie appears that possibly

no other bids were received for scope of work covered at Part B of NIT.

13.0 OUTWARD REMITTANCES BY MEGPTCL THROUGH PMC TO EIF

13.1 Letters of credit issued by the Banks and the remittances made against it

by MEGPTCL for the ultimate benefit of EIF through PMC Projects (India) Private

Limited, were examined in relation to scope of work for Part B of the NIT involving

supply of Auto Transformers, Shunt Reactors etc. M/s PMC Projects (India) Pvt. Ltd

appears to have placed back-to-back order for supply of Auto Transformers and Shunt

Reactors along with Disc Insulators and OPGW a/with hardware and fitting thereof for

the two transmission lines on EIF (one of consortium member) vide Agreement No.

415703 dated 1-10-2010 for an aggregate consideration of US$376,195,652/-. The

said Agreement provides break up of different items of supply in the Summary Sheet

to the Price Schedule at Schedule-I to the said Agreement, scanned image of which is

reproduced below :-

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13.2 Total cost of 765/400 KV, 500 MVA, single phase Auto Transformer

along with mandatory spares (Sr. No.-A) and 765 KV, 80 MVAR, 765 KV, single phase

Shunt Reactors along with mandatory spares (Sr. No.-B) for substations works out to

US$260269798 (US$118931930+US$141337868).

13.3 M/s MEGPTCL made applications to two banks for issue of Transferable

Letters of Credit in US Dollars from time to time for different amounts aggregating to

US$ 256156714.5 in favour of PMC to be transferred to EIF against order placed by it

on the consortium led by PMC, as detailed below:-

Table-16

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Details of the LCs issued by Banks in response to MEGPTCL’s application

Sr. No. Transferable L.C No. L. C.date Final L. C Value (US$) IssuingBank

1 0024ILC00025012 07-03-2012 17290291.16 ICICI Bank

2 0024ILC00018213 01-10-2012 19000000 ICICI Bank

3 0024ILC00024912 07-03-2012 17470825.99 ICICI Bank

4 0024ILC00004313 29-06-2012 18596464.44 ICICI Bank

5 0024ILC00004213 28-06-2012 17929082.01 ICICI Bank

6 0024ILC00004113 25-06-2012 15660178.71 ICICI Bank

7 0024ILC00004013 25-06-2012 17939106.13 ICICI Bank

8 0024ILC00004414 15-05-2013 12720000 ICICI Bank

9 0024ILC00004413 29-06-2012 16389630.82 ICICI Bank

10 0024ILC00004513 29-06-2012 15755135.27 ICICI Bank

11 00415211IM0050196 09-12-2011 18000000 SBI

12 00415211IM0050198 13-12-2011 18800000 SBI

13 00415211IM0050203 16-12-2011 19606000 SBI

14 00415211IM0050204 19-12-2011 18000000 SBI

15 00415211IM0050205 21-12-2011 13000000 SBI

Total 256156714.5

13.4 The aggregate amount of foreign exchange actually remitted by

MEGPTCL directly to EIF through the transferable LCs after deducting the “Usance

Interest and Marine Insurance” works out to US$ 253537619 as detailed below :-

Table-17

Details of amount actually remitted to EIF through the L/Cs shown at Table-16

Sr.no Transferable L.C No. L. C.date

Amount Transferred to

Electrogen Infra FZE UAE through transferable L.C by SBI, CAG, Ahmedabad, (US$)

Date Of transfer L.C To Electrogen Infra FZE UAE by SBI, CAG Ahmedabad

1 0024ILC00025012 07-03-2012 17275291.16 13-04-2012

2 0024ILC00018213 01-10-2012 19000000 11-10-2012

3 0024ILC00024912 07-03-2012 17455825.99 13-04-2012

4 0024ILC00004313 29-06-2012 18127574.27 04-07-2012

5 0024ILC00004213 28-06-2012 17477325.32 04-07-2012

6 0024ILC00004113 25-06-2012 15265200.43 04-07-2012

7 0024ILC00004013 25-06-2012 17487096.66 04-07-2012

8 0024ILC00004414 15-05-2013 12709066.55 27-05-2013

9 0024ILC00004413 29-06-2012 15976375.96 04-07-2012

10 0024ILC00004513 29-06-2012 15357862.64 04-07-2012

11 00415211IM0050196 09-12-2011 18000000 10-12-2011

12 00415211IM0050198 13-12-2011 18800000 13-12-2011

13 00415211IM0050203 16-12-2011 19606000 16-12-2011

14 00415211IM0050204 19-12-2011 18000000 19-12-2011

15 00415211IM0050205 21-12-2011 13000000 21-12-2011

Total 253537619

Note : L/Cs at Sr. No. 1 to 10 above were initially opened by ICICI bank as Local

Transferable L/Cs in Foreign Exchange which were later transferred to SBI which

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made the remittances. The actual remittances to EIF were facilitated by SBI,

Ahmedabad though OC were opened by ICICI Bank also.

14.0 RELATIONSHIP BETWEEN EIF, ELECTROGEN INFRA HOLDING PVT. LTD.

ON ONE HAND AND PMC & MEGPTCL ON THE OTHER THROUGH FAMILY

MEMBERS OF THE ADANIS:-

14.1 The parties involved in the present set of transactions involving import of

equipments and machinery for the two transmission lines and sub-stations thereof,

are :-

i) MEGPTCL-(wholly owned subsidiary of M/s Adani Enterprises Limited)-

the Licencee i.e , holder of the Transmission Licence issued by MERC

and the owner of the facility

ii) M/s PMC Projects (India) Private Limited, the contractor engaged by

MEGPTCL to execute its procurement by way of imports.

iii) M/s Electrogen Infra FZE, the UAE based intermediary invoicing agent

who raised invoices on M/s PMC Projects (India) Private Limited.

14.2 MEGPTCL is a wholly owned subsidiary of Adani Enterprises Limited

(AEL), the flagship company of the Adani Group. This fact stands well documented in

the Notes forming part of the Consolidated Financial Statements of AEL for the year

ended on 31st March, 2013, which in turn form part of its Annual Report 2012-13,

wherein M/s Adani Enterprises Limited is clearly shownto hold 100% of shares of

MEGPTCL. This position has continued since inception of MEGPTCL which is reflected

in the Financial Statements for the years ending 31st March 2012 and 31st March

2011. Therefore, MEGPTCL is directly related to the Adani Group as a result of this

parent-subsidiary relationship and shares common business interest.

14.3 As per documents available on record, MEGPTCL was incorporated on

15-02-2010 under the Companies Act, 1956 with the specific purpose to develop the

intra-state transmission system, as a joint venture company of Adani Enterprises

Limited (AEL) and Maharashtra State Electricity Transmission Company Ltd (MSETCL)

with equity participation of 74% and 26% respectively. However, AEL had an option

toarrange additional equity contribution of 26% (in place of MSETCL). This was

proposedand was and accepted, is evident from the contents of Order dated 14th

September 2010 passed by MERC(RUD-D/72). Therefore, even on inception of the

joint venture, as of February 2010, the Adani Group had a significant hold on

MEGPTCL by way of its 74% equity holding through AEL. It appears that the option to

infuse additional 26% equity (earmarked for MSETCL on formation) was exercised by

AELitself, in due course of time, as a result of which MEGPTCL became its wholly

owned subsidiary. Therefore, since the time of formation itself, AEL,by virtue of their

holding, appears to have absolute control over MEGPTCL.

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14.4 From the documents submitted by M/s PMC Projects (India) Private

Limited under its letter dated 12-03-2013,it appears evident that based on the

Transmission Licence granted to it by MERC, MEGPTCL from time to time applied to

the Principal Secretary, Energy Department, Government of Maharashtra, Mantralaya

Main Building, Mumbai, requesting for issuance of essentiality certificates for import

of Auto-Transformers with accessories &Shunt Reactors with accessories for sub-

stations at Tiroda, Koradi-III and Akola and Shunt Reactors at Aurangabad. It also

appears that the Principal Secretary (Energy),acceding to the request of MEGPTCL,

granted them the essentiality certificates, by way of endorsing the list of goods eligible

for essentiality certificate and conveying such certifications directly to the

jurisdictional Commissioner of Customs i.e Commissioner of Customs, Kandla Custom

House, recommending grant of concessional rate of duty under the Project Import

Regulations, 1986 for the certified goods.Through each such letter addressed to the

Commissioner of Customs, Kandla, as well as to the Principal Secretary (Energy),

MEGPTCL have themselves stated that they proposed to import goods fromM/s

Electrogen Infra FZE, UAE through M/s PMC Projects (India) Private

Limited.From this,it becomes clear that M/s MEGPTCL is the de-facto importer even

though they have engaged the contractor M/s PMC Projects (India) Private Limited for

filing bills of entry and clearing goods. It is also not in dispute that M/s MEGPTCL is

the sole and ultimate owner of the transmission line set up with the aid of imported

equipment & machinery and consequently of the imported equipments&machinery

installed as part of the facility.

14.5 As per various documents discussed in the foregoing paragraphs,

development and progress of EIF, since its registration on 07-07-2009 as a company

in the UAE, was as under :-

14.5.1 EIF was initially registered as a company in the name and style of M/s

Sichuan Machinery & Equipments FZE in SAIF Zone, Sharjah, UAE. Its Memorandum

& Articles of Association was dated 07-07-2009 and Shri Nasser Ali Shaban Ahli was

its sole promoter and shareholder having subscribed the entire share capital of AED

1,50,000 divided into one share of AED 1,50,000 (Memorandum and Articles of

Association dated 07-07-2009 refer in para 4.3.4).

14.5.2 M/s Sichuan Machinery & Equipments FZE passed a resolution

dated 19-11-2009 authorising Shri Jatin Shah singly as authorised signatory of its

bank accounts to open, operate and close banking accounts with any bank in the UAE

(para 4.3.3). Shri Jatin Shah is an ex-employee of Adani Group having resigned as

General Manager of Adani Power Limited ony on 31-08-2009 (para 4.1.21)

14.5.3 The Memorandum & Articles of Association of EIF dated 07-07-

2009 was amended thrice as under :-

i) On 04-01-2010-Changing name of company from M/s Sichuan

Machinery & Equipments FZE to M/s ElectroGen Infra FZE (para 4.3.4)

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ii) On 29-03-2010-Transfer of ownership of M/s ElectroGen Infra FZE from

Shri Nasser Ali Shaban Ahli to Electrogen Infra Holding Pvt. Ltd.,

Mauritius, thus making the EIF a fully owned subsidiary of EIH (para

4.2.8).

iii) On 17-06-2010-Increasing share capital of M/s ElectroGen Infra FZE

from AED 1,50,000 to AED 54,00,000/-. (para4.4.12). The increase in

the share capital was subscribed fully by M/s Electrogen Infra Holding

Pvt. Ltd., Mauritius, which was its holding company, during the

Financial Year 2010-11 (para 4.2.9).

14.5.4 From 29-03-2010, EIF became a 100% owned subsidiary of EIH

[para 4.2.8 &4.2.5 (iii)]. Further, share capital of AED 52,50,000 divided into 35

shares of AED 1,50,000 each was infused by EIH between 01-04-2010 to 21-06-2010

(para 4.2.9)

14.6 Similarly, development and progress of M/s Electrogen Infra Holding Pvt.

Ltd. , since its incorporation as a company in Mauritius, as observed from various

documents discussed in the foregoing paras, was as under :-

14.6.1 It was incorporated as a private company in Mauritius on 16-07-

2009 in the name and style of M/s Sichuan Machinery & Equipment Import & Export

Co. Ltd with paid-up equity share capital of USD 1000 divided into 1000 shares of

USD 1 each subscribed wholly by Shri Nasser Ali ShabanAhli.(para 4.2.4).

14.6.2 Name of the Company was changed to M/s Electrogen Infra

Holding Pvt. Ltd. with effect from 08-01-2010 by Special Resolution (para 4.2.11).

14.6.3 The entire share capital of the company i.e. USD 1000 divided into

1000 shares of USD 1 each was transferred to Shri Vinod Shantilal Shah on 12-01-

2010 from Shri Chang Chung Ling who in turn had purchased it from Shri Nasser Ali

Shaban Ahli, the initial subscriber, on 01-10-2009 (para 4.4.13 &4.4.14). Shri Nasser

Ali Shaban Ahli was also the initial subscriber of share capital of EIF on 07-07-2009

which he sold to EIH on 23-03-2010 (para 4.2.8).

14.6.4 Shri Vinod Shantilal Shah was also appointed Director of the

company on 12-01-2010 i.e. the date when the whole of share capital of EIH on that

date was transferred to him and continued as a Director till he resigned on 31-05-

2011 (para 4.4.9)

14.6.5 Paid-up share capital of the company was increase from USD

1000 to USD1,00,000 during the Financial Year 2010-11 (para 4.2.4 above).

14.6.6 EIH took over EIF’s entire paid-up capital of AED 1,50,000 on 29-

03-2010 and subscribed to further share capital of AED 52,50,000 between the period

from 01-04-2010 to 21-06-2010, because as shown in share certificate 4107 dated 21-

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06-2010 (para 4.2.9), EIH is mentioned as holder as on that date of 36 shares of AED

54,00,000.

14.6.7 Shri Vinod Shantilal Shah was the only owner of EIH as on 12-01-

2010. (para4.2.4). So, when full ownership of EIF was taken over by EIH as 29-03-

2010, Shri Vinod Shantilal Shah became owner of EIF also.

14.7 EIF was the intermediary invoicing agent between the OEMs/actual

suppliers and PMC. EIF was registered in the name and style of M/s Sichuan

Machinery and Equipments FZE on 07-07-2009 in the UAE with Shri Nasser Ali

Shaban Ahli as the sole share-holder holding the whole of share capital of the

company equal to AED 1,50,000 divided into one share of 1,50,000. Simultaneously,

Shri Nasser Ali Shaban Ahli incorporated another company by name M/s Sichuan

Machinery & Equipment Import & Export Co. Ltd in Mauritius, on 16-07-2009 by

subscribing to the whole of its paid-up capital of USD 1000 divided into 1000 shares

of USD one each. EIF, by way of Board Resolution dated 19-11-2009, authorised Shri

Jatin Shah, an ex-employee of Adani Group, to open, operate and close bank accounts

of the company with any bank in the UAE. Name of the existing company M/s

Sichuan Machinery and Equipments FZE in the UAE was changed to EIF on 04-01-

2010. Simultaneously, the name of M/s Sichuan Machinery & Equipment Import &

Export Co. Ltd in Mauritius was also changed to ElectroGen Infra Holding Pvt. Ltd. on

08-01-2010. Shri Nasser Ali Shaban Ahli transferred and sold the whole of equity

share capital of USD 1000 divided into 1000 shares of one USD each of M/s Sichuan

Machinery & Equipment Import & Export Co. Ltd, Mauritius (presently EIH) to Chang

Chung Ling on 01-10-2009, who further transferred the said share capital to Shri

Vinod Shantilal Shah on 12-01-2010, who thus became the sole owner of EIH.

Thereafter, Shri Nasser Ali Shaban Ahli also transferred and sold the whole of share

capital of EIF on 29-03-2010 to EIH and thus, EIH became holding company of EIF

with effect from 29-03-2010. Shri Vinod Shantilal Shah has been mentioned in

various documents as Authorised Signatory (para 4.4.3, 4.4.4 &4.4.7) and Director

(para 4.4.5) in connection with EIF.

14.7.1 EIF’s status as subsidiary of EIH is mentioned in various documents on

various dates such as;-

i) In letter dated 26-04-2012 from EIF addressed to ICICI Bank,

DIFC, Dubai Branch (para 4.2.3)

ii) In letter dated 23-10-2012 from EIF addressed to Axis Bank,

Dubai (para 4.4.10)

iii) Copies of amended Licence certificates issued by SAIF Zone

authorities as of 07-08-2012 and 19-06-2012 (para 4.4.11)

iv) In letter dated 09-12-2013 of Shri Jatin Shah addressed to DRI

(para 5.12)

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v) In letter dated 18-12-2013, addressed by Axis Bank, DIFC,Dubai

Branch to DRI (para 4.4.1)

14.7.2 EIF, in its letter dated 26-04-2012 addressed to ICICI Bank, DIFC,

Dubai Branch informed its share holding pattern as under (para 4.2.3 above):-

i) Electrogen Infra FZE is 100% owned by Electrogen Infra Holding Pvt. Ltd.

ii) Electrogen Infra Holding Pvt. Ltd. is 100% owned by Asankhya Resources

Pvt. Ltd.

iii) Asankhya Resources Pvt. Ltd. is owned by Eagle Holding Ltd., which is a

nominee shareholder in Asankhya Resources Family Trust.

iv) In Asankhya Resources Family Trust, Mr. Vinod Shantilal Adani is the

settler.

Thus, it appears that EIF is owned by Shri Vinod Shantilal Adani through the

above process of layering which is the common and known modus-operandi for

siphoning off of money by masking the actual owners.

14.7.3. Perusal of Financial Statements of EIH for the year 2010-11 (para 4.2.4)

reveals that as on 31.03.2010, it had an investment of USD 40,872/- in an unquoted

company, which went up to USD 14,81,390/- as on 31.03.2011. EIF, registered in

UAE, is the only company where EIH was holding equity of AED 1,50,000/- as on

31.03.2010, which was purchased by it from Shri Nasser Ali ShabanAhli on

29.03.2010. Share capital of EIF was increased from AED 1,50,000/- to AED

54,00,000/- on 17.06.2010, and the increase was fully subscribed by EIH only, by

investing USD 14,40,518/- (equal to AED 52,50,000/-) as is evident from share

certificate dated 21.06.2010 (para 4.2.9). Perusal of the Financial Statements of EIH

further reveals that on an amount of USD 14,81,390/- invested by EIH in EIF, it

received dividend income of USD 5,39,50,954/-, [EIF declared a dividend of AED 198

million for the year 2010-11 as revealed in its financial statement (para 4.2.5) and the

whole of these dividends went to EIH because EIF was a 100% subsidiary of EIH]

which works out to a return of 3641.91%, which is unheard of in any legitimate

business activity.

14.8 By virtue of his capacity as a Director of M/s Electrogen Infra Holding

Pvt. Ltd. , Mauritius, Shri Vinod Shantilal Adaniappears to have enjoyed a direct and

absolute control over its wholly owned subsidiary M/s Electrogen Infra FZE, UAE. In

addition to being directly related to Electrogen Infra FZE, UAE, in his capacity as a

Director of its parent holding company (Electrogen Infra Holdings Pvt. Ltd., Mauritius),

it is an undisputed fact that Shri Vinod Shantilal Adani also happens to be a member

of the Adani Family and one of siblings of the Adani brothers(refer para4.5.17above)

operating the group’s business in diverse areas through and under the banner of its

flagship company, M/s Adani Enterprises Limited (AEL).Shri Vinod Shantilal Adani is

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one of five brothers who, inter-alia, has a substantial share-holding in the flagship

company of the group i.e M/s Adani Enterprises Limited and his shareholding is a

part of promoter/promoter group shareholding. The shareholding pattern for the

quarter ending June 2013 reveals him to hold 90749100 shares in the group’s flagship

company (AEL),which work out to about 8.25% of the total share capital of AEL as per

information submitted to DRI on 25-09-2013,(RUD-D/73)during course of the visit of

the officers to Ahmedabad. Therefore, while being a promoter shareholder of the flag

ship group company all along, Shri Vinod Shantilal Shah, concurrently appears to

have held the position of a Director of the parent holding company of M/s Electrogen

Infra FZE, UAE. MEGPTCL, which is a wholly owned subsidiary of AEL is thus

directly related to Electrogen Infra FZE, UAE (wholly owned subsidiary of Electrogen

Infra Holdings Pvt. Ltd., Mauritius having Shri Vinod Shantilal Adani as its owner).

Thus, the importer MEGPTCL and the overseas intermediary invoicing agent EIFare

related. Shri Vinod Shantitlal Shah, is a member of the Adani family, which runs the

flagship company of the Group Adani Enterprises Limited and is also a promoter share

holder therein. This appears to reveal direct and clear nexus the Adani Group has with

the overseas intermediary invoicing agent EIF through Vinod ShantilalAdani. This in

turn appears to indicate that the so called supplier and the de-facto importer i.e

MEGPTCL are also related to each other since MEGPTCL is a wholly owned subsidiary

of the Adani Group.

14.9 Therefore, EIF, the intermediary invoicing agent, and MEPTCL, the owner

and de-facto importer appear to be related to each other through Shri Vinod Shantilal

Adani @ Vinod Shantilal Adani in terms of Rule 2 (2) of the CVR, 2007.

14.10 In so far as M/s PMC Projects (India) Pvt. Ltd. is concerned,

investigations have revealed that two of its employees, Shri Dharmesh Parekh, Senior

Manager and Shri Jaydev Mishra, Associate General Manager, both of whom joined

PMC Projects (India) Private Limited in the same year i.e in 2008 had their association

with the Adani Group in the past (prior to 2008), having served one of the group

companies as employees. While Shri Dharmesh Parekh, served as an employee of

Adani Energy Limited for three years between 2005-2008, Shri Jaydev Mishra served

Adani Power Limited for over a year since 2007, till they joined M/s PMC Projects

(India) Private Limited in varying capacities in the year 2008. In view of their

association with the group, these employees appear to have got closely acquainted

with the functioning of the Adani Group. During their employment with M/s PMC

Projects (India) Private Limited, they appear to have signed important documents in

the nature of contracts/agreements/power of attorney, particulars of which are

tabulated below :-

Table-18

Summary of agreements/contracts signed by Shri Jaydev Mishra and Shri

Dharmesh Parekh, both employees of PMC Projects (I) Pvt. Ltd.

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Sr.No. Documents description JAYDEV MISHRA DHARMESH PAREKH

1 Consortium Agreement dated 16-10-2010 between M/s PMC

Projects (India) Private Limited, (PMC) M/s Electrogen Infra FZE, UAE (EIF) and M/s Hyundai Heavy Industries Co. Ltd., South Korea

Signatory to the agreement as authorised signatory for and

on behalf of lead member of the consortium i.e. PMC

Signatory to the agreement as authorised signatory for and on

behalf of one of the members of the consortium i.e. EIF.

2 Power of Attorney (POA) for Lead Member executed by & between M/s PMC Projects (India) Private Limited, M/s Electrogen Infra FZE,

UAE and M/s Hyundai Heavy Industries Co. Ltd., South Korea

Signatory to the POA as an Executant for and on behalf of Lead Member of the consortium i.e PMC & signed

in token of acceptance of POA for & on behalf of PMC

Signatory to the agreement as authorised signatory for and on behalf EIF (one of the Consortium member)

3 Agreement No.700003 dated 05-

10-2010 between M/s Electrogen Infra FZE, UAE and M/s Hyundai Heavy Industries Co. Ltd., South

- Signatory to the agreement as

authorised signatory for and on behalf of EIF.

4 Agreement No.700001 dated 05-10-2010 between M/s Electrogen Infra FZE, UAE and M/s Sediver Indulators (Shanghai) Co. Ltd. ,

China

- Signatory to the agreement as authorised signatory for and on behalf of EIF.

5 Agreement No.700002 dated 05-10-2010 between Electrogen Infra

FZE, UAE and M/s Dalian Insulator Group Co. Ltd., China

- Signatory to the agreement as authorised signatory for and on

behalf of EIF.

6 Agreement No.700004 dated 05-10-2010 between M/s Electrogen

Infra FZE, UAE and M/s Suzhou Furukuwa Power Optic Cable Co. Ltd., China

- Signatory to the agreement as authorised signatory for and on

behalf of EIF.

7 Letters, correspondences, offers/bid between M/s PMC Projects (India) Pvt. Ld. and MEGPTCL

Signatory to most of the correspondence made with MEGPTCL and acknowledging receipt of key documents such

as Purchase Order, Letter of Intent etc issued by MEGPTCL to PMC

-

8 Agreement No. 415703 dated 01-10-2010 between M/s PMC Projects (India) Private Limited and M/s Electrogen Infra FZE , UAE

(EIF)

Signatory to the agreement as authorised signatory for and on behalf of PMC

Signatory to the Agreement as a witness i.e signed in token of having witnessed the signing of the agreement by Shri Jatin Shah, who

signed for and on behalf of EIF

9 Agreement dated 28-09-2010 by and between M/s PMC Projects

(India) Private Limited and M/s ABB Limited

Signatory to the agreement as authorised signatory for and

on behalf of PMC

Signatory to the Agreement as a witness i.e signed in token of having

witnessed the signing of the agreement by Shri Jaydev Mishra, who signed for and on behalf of PMC

10. Amendment no. 1 dated 30-09-

2011 to Agreement No. 415703 dated 01-10-2010 between M/s PMC Projects (India) Private

Limited and M/s Electrogen Infra FZE , UAE (EIF)

Signatory to the agreement as

authorised signatory for and on behalf of PMC

-

It may be seen from the description of the document given in Table-18 above that

these are vital documents which constitute the cause of action that led to the

execution of the entire workassociated for the projectinvolving setting up of two

numbers of 765 KV S/C transmission lines from Tiroda-Koradi III – Akola II –

Aurangabad, 400 KV D/C Line from Akola II –Akola I and associated 765/400 KV

substations at Tiroda, Koradi III, Akola II and Aurangabad, for execution of which

MEGPTCL had been given a Transmission Licence by MERC and which sub-contracted

the works to PMC Projects (India) Private Limited.

14.11 It appears that Shri Dharmesh Parekh, employee of PMC had signed

contracts/agreements as an authorised signatory for and on behalf of a UAE based

company, EIF, as admitted by him in his statement recorded under Section 108 of the

Customs Act, 1962 on 10-12-2013.(RUD-S/1)These contracts including the contract

between EIF and M/s Hyundai Heavy Industries Co. Ltd., South Korea,are key

documents which formed the basis of procurement of goods by EIF for ultimate supply

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to MEGPTCL through PMC Projects (India) Private Limited. Shri Dharmesh Parekh in

his statement recorded under Section 108 claimed to have signed the respective

agreements on the basis of authorisation given to him by Shri Jatin Shah, Director of

EIF.It is inconceivable that a non-related foreign registered company confers the

authority /authorises the employee of, ostensibly an unconnected private limited

company in India to sign important documents viz. letters of intent, letters of award,

contracts etc. on its behalf, as an authorisedperson,simply by issuing a one page

document to the said effect. The one page document, in the form of an authority letter,

is apparently signed by Shri Jatin Shah on behalf of EIF, on one part in token of

having conferred the authority to sign on Shri Dharmesh Parekh (apparently in his

individual capacity) and signed by Shri Dharmesh Parekh, on the other part,

apparently in token of accepting the said authorisation, in individual capacity. It is

also unusual for an ordinary employee of private limited company in India to accept

such an authorisation given by a foreign registered company to sign documents on its

behalf, as an authorised signatory, to exercise such power in an unhesitant manner

and proceed to sign several key documents with huge financial implications running

into millions of US Dollars. It is a recorded fact both Shri Dharmesh Parekh and Shri

Jatin Shah, have in the past served the Adani Group as employees in group

companies. This prima-facie appears illogical and the only logical conclusion is that

for these individuals there is no distinction between these two companies, though on

paper it may be so and that their interests are common.

14.12 It is relevant to mention here that Shri Dharmesh Parkeh in his

statement recorded on10-12-2013(RUD-S/1)on being questioned on these aspects

has,inter-alia,deposed that he had never travelled abroad at any point of time which

clearly indicates that all documents signed by him for and on behalf of the UAE based

company EIF were signed in India. In his subsequent statement recorded under

Section 108 of the Customs Act, 1962 on 28-02-2014, (RUD-S/5)on being specifically

questioned about receipt of remuneration of any kind from EIF towards the signing

authority conferred on him and exercised by him, he deposed that he had not been

paid any consideration/remuneration at any point of time by EIF. In response to

specific questions viz. whether he had informed his employer firm i.e M/s PMC

Projects (I) Private Limited before accepting such a signing authority for and on behalf

of a foreign entity i.e. M/s Electrogen Infra FZE, UAE; on whose

directions/instructions he proceeded to accept such an authorization; whether he had

informed his superiors regarding this aspect, and if so, to name the person whom he

had informed. To this, he responded by stating that he did not recollect whom he had

informed within his company and on whose instructions/directions he had accepted

such an authority from a foreign entity. He also stated that he did not recall if he had

informed anybody in his company (PMC) before accepting such an authority from a

foreign company.

14.13 The entire sequence of events starting with Shri Dharmesh Parekh, being

conferred the power to sign on behalf of a foreign registered company (EIF) during his

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employment with a private limited company in India (PMC), his proceeding to sign

agreements & important documents having financial implications of hundreds of

millions of US Dollars (Sr.No. 1 to 6 of Table-18) in exercise of the said authorisation

and offering his services free of charge without any extra consideration/remuneration

and his plea of being unable to recollect if he had informed any of his superiors within

his employer firm PMC,only goes to show that for him there is no distinction between

PMC and EIF. Looking at the issue from other side, the fact that the so called UAE

based company has allowed Shri Dharmesh Parekh, an employee of PMC to sign

agreements on its behalf with financial implications of over hundreds of millions of US

Dollars, clearly imply that even EIF has treated Shri Dharmesh Parekh as its own

authorised representative. All these only go to show that there is no distinction

between PMC and EIF, they are only working for common interest as a part of a large

modus-operandi for siphoning off of money from India by invoice inflation.

14.14 Shri Jaydev Mishra, Associate General Manager of M/s PMC Projects

(India) Private Limited, to whom Shri Dharmesh Parekh, reports to in the company as

his sub-ordinate/junior, on being specifically questioned regarding Shri Dharmesh

Parekh during the course of his statement recorded under Section 108 of the Customs

Act, 1962 on 17-02-2014, (RUD-S/4)categorically acknowledged in the affirmative that

that he knew Shri Dharmesh Parekh as an employee of M/s PMC Projects (I) Pvt. Ltd.

since the year 2008 and that Shri Dharmesh Parekh reported to him.On being further

questioned to explain if Shri Dharmesh Parekh had the authority or power to sign

documents/agreements/contracts on behalf of various companies including foreign

entities in the background of local Indian laws of employment, he responded by stating

that he was not aware whether Shri Dharmesh Parekh had any authority or power to

sign on behalf of various companies including foreign entities.In this context, perusal

of the signatories to agreements/documents listed at Sr.Nos. 1 and 2 of Table-

18,clearly shows that both the ex-employees of the Adani Group were signatories to

the said documentsin varying capacities. Shri Jaydev Mishra, having signed the

Consortium Agreement (Sr.no. 1 of Table-18) as well as the Power of Attorney (Sr.No. 2

of Table), as an authorised signatory of M/s PMC Projects (India) Private Limited)and

Shri Dharmesh Parekh, his sub-ordinate, having signed as authorised signatory for

and on behalf of M/s Electrogen Infra FZE, UAE, boththe documentshaving been

executed between M/s PMC Projects (India) Private Limited, M/s Electrogen Infra FZE,

UAE and M/s Hyundai Heavy Industries Co. Ltd., South Korea. The fact that two

employees of PMC: senior and sub-ordinate duo (Shri Jaydev Mishra and Shri

Dharmesh Parekh) signed the Consortium Agreement on 16.10.2010 for and on behalf

of two different companies, one for PMC and the other for the overseas company EIF,

clearly obliterates the distinction between these two companies, as if they are two

sides of the same coin.

14.15 It, therefore, appears that both the above personnel, being ex-employees

of the Adani Group, continued to serve the interest of the groupby their acts of

omissions and commission, while being employed with M/s PMC Projects (India)

Private Limited. Both the employees appear to have traversed beyond the scope of

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their normal role and responsibilities as employees of M/s PMC Projects (India) Private

Limited by their acts of omission and commission; Shri Dharmesh Parekh by

proceeding to sign on behalf of a foreign registeredentity and his superior, Shri Jaydev

Mishra, knowinglyallowing/permitting his sub-ordinate to sign for and on behalf of a

foreign company, without raising any objection as a superior. That they acted in the

manner they did, only shows that for them, PMC Projects (India) Pvt. Ltd., Ahmedabad

and Electrogen Infra FZE, UAE were not different; both these entities were merely

acting to further the Adani group’s interest. That Electrogen Infra FZE, UAE is not a

bonafide supplier but merely a front for creating inflated invoices as part of the overall

plan is obvious from the above.

14.16 It further appears that the M/s PMC Projects (India) Private Limited was

directly related to the Adani Group at one point in time through Shri Malay

Mahadevia, one of the Directors in M/s PMC Projects (India) Private Limited,who in

addition to that,also appeared to be a director in Adani Hazira Port Pvt. Ltd as per

information available in the Import-Export-Code (IEC) profile (RUD-D/74).The Articles

of Association of PMC Projects (India) Private Limited as of 27-04-2005 submitted by

M/s PMC Projects (India) Private Limited thorough their letter dated 08-01-2014reveal

that PMC Projects (India) Private Limited was a subsidiary of a Mauritius based

company, M/s Projects Monitoring Construction Limited, having its address at 44,

St.George Street, Port Louis, Republic of Mauritius, which subscribed to 10,000

shares (9999 shares through nominee Dr.Malay Mahadevia and one share through

him individually)of PMC. Presently, it appears that PMC Projects (India) Private

Limited is a wholly owned subsidiary of PMC Infra Limited, Mauritius. It appears that

name of the holding company of PMC was changed from M/s Projects Monitoring

Construction Limited initially to M/s Gudami International (Mauritius) Limited, and

finally to PMC Infra Limited.

14.17 With a view to ascertain who controlled the Mauritius based parent

company of M/s PMC Projects (India) Private Limited, two of the directors of M/s PMC

Projects (India) Private Limited, Col Vinod George (Retired) and Shri U.V.Phani Kumar

during the course of their joint statement recorded under Section 108 of the Customs

Act, 1962 on 07-03-2014 (RUD-S/6),inter-alia,had undertook to submit authentic

documents relating to the constitution and share holding pattern of M/s PMC Infra

Limited, Mauritius within five days. They also assured to confirm and revert if M/s

PMC Projects (I) Pvt Ltd. was the only subsidiary company of PMC Infra Limited within

five days. However, they failed to provide any information on these aspects. On or

about 10-03-2014, through a letter bearing Ref: PMC/DRI/JM/1451/14, (RUD-

D/75)Shri U.V. Phanikumar, Director of the company, stated that he had no idea of

either the shareholding pattern of M/s PMC Infra Limited, Mauritius or information

about its other subsidiaries.

14.18 From the response of Shri Vinod George and Shri U.V.Phanikumar, both

being key management personnel for M/s PMC Projects (India) Private Limited, Shri

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Vinod George, holding the position since 17-05-2010,it appears rather unusual that

key management personnel within the company have no knowledge or idea of the

constitution and share holding pattern of the parent holding company in Mauritius

and related information. From their acts, it appears that they are deliberately

refraining from divulging information in their domainso as to thwart investigation into

relationship between M/s PMC Projects (India) Private Limited and the Adani Group.

14.19 It appears that PMC Projects (India) Private Limited, as a contractor,

entrusted with the responsibility of executing work ordered on it by MEGPTCL, itself

sought financial assistance from MEPTCL and requested them to open transferable

Letters of Credit (LCs) in its favour. MEPTCL also acceded to this request and agreed

to open transferable letters of credit. By way of an arrangement with MEGPTCL, they

subsequently have straightway arranged for remittances to be made to EIF by

amending the LCs to incorporate the name of EIF as the beneficiary. Thus, the

remittances for the invoices received by M/s PMC Projects (India) Private Limited

fromEIF were actually made directly by M/s MEGPTCL to EIF through mechanism of

transferable letters of credits. These sorts of transactions are not normal business

practices. M/s PMC Projects (India) Private Limited appears to have rendered its

services as a contractor, free of charge, without any consideration, as they have failed

to retain any margin money for themselves, i.e difference between its cost of

procurement and price of supply which appears to be another abnormality.

14.20 Therefore, the activities of M/s PMC Projects (India) Private Limited

appear to be managed, controlled and influenced by the Adani Group through its

entity MEGPTCL, common directors and employees. M/s Electrogen Infra FZE, based

in the UAE,appears to be only a front for facilitating siphoning of funds through over-

valuation of imports by creating inflated intermediary invoicing.

15.0 REJECTION OF DECLARED VALUE AND RE-DETERMINATION OF

ASSESSABLE VALUE

15.1 Based on documents obtained from AXIS Bank, DIFC branch, UAE and

Bank of Baroda, Dubai Main Branch, Bur Dubai, (back-to-back procurement invoices

-invoices raised by OEMs on M/s Electrogen Infra FZE, UAE) for consignments

shipped to India by various OEMs and cleared through Customs on the strength of

invoices with inflated prices raised by M/s Electrogen Infra FZE on PMC Projects

(India) Private Limited, a tabulated chart has been prepared which gives details of all

such consignments imported by MEGTPCL through PMC Projects (India) Private

Limited. A total of 57 consignments imported by MEGPTCL through PMC Projects

(India) Private Limited have been detailed in Annexure A to this Show cause notice.

Particulars in Columns [A] to columns[G] of Annexure Ato this Notice have been

tabulated on the basis of information available in the documents submitted by PMC to

the Customs at the time of assessment, on the strength of which the goods were

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assessed and cleared for home consumption. These documents were submitted to DRI

by the importer in response to the requisitionbearing F.No. DRI/MZU/CI-224/2013

dated 17-10-2013.The inflated invoice prices as appearing in the invoices raised by

M/s Electrogen Infra FZE, UAE on the basis of which the assessable valueswere

worked out and declared in the respective bills of entry is available at Column [F].

Particulars in Columns [H] to [L] have been tabulated on the basis of information

available in the respective shipper (OEM) invoices raised on M/s Electrogen Infra FZE

by the respective OEM.In respect of Bills of Entry shown at Sr.No. 56 and 57of

Annexure A, pertaining to shipments by M/s Hyundai Heavy Industries Co. Ltd. and

M/s Suzhou Furukawa Power Power Optic Cable Co.Ltd,respectively, the differential

value has been worked out on the basis of proportionate contract value for

identical/similar goods available in Contract No. 700003 dated 05-10-2010 between

HHICL &EIF and contemporary price of similar goods available in other OEM-invoices

raised by M/s Suzhou Furukawa Power Optic Cable Co.Ltd on EIF, respectively.

15.2 A chart containing particulars of the said 57 consignments imported by

M/s PMC Projects (India) Private Limited (B.E.No. /date, bill of lading no. /date) with

details of corresponding OEM invoices, as featured in Annexure A to this notice, was

shown to Shri Mayur Shah, ex-Associate Vice President of M/s PMC Projects (India)

Private Limited and Shri Jaydev Mishra, Associate General Manager, M/s PMC

Projects (India) Private Limited during the course of their statements recorded under

Section 108 of the Customs Act, 1962, on 17-02-2014. After going through

information in the said chart and physical cross verification thereof on the basis of

copies of OEM invoices/packing lists and copies of corresponding bills of lading, they

confirmed that the OEM invoices/packing lists pertained to consignments imported

and cleared on the strength of invoices raised by EIF, thereby confirming authenticity

of back-to-back nature of the invoicing pattern.

Note : The chart shown to them during the course of their statement on 17-02-2014

contained 58 bills of entry, as one bill of entry 7420406 dated 18-07-2012 had been

inadvertently repeated at Sr.No. 34 and again at Sr.No. 54.The duplicate entry has

since been deleted while preparing Annexure-Amaking it a total of 57 import

consignments.

15.3 In the 57 Bills of Entry featured in Annexure-A, it has been held out that

the value declared therein represents the Transaction Value paid or payable for the

goods imported, which is not correct, legally or factually for the following reasons :-

(i) PMC and EIF, the so called buyer and seller were not different. EIF was

only a front and intermediary invoicingagent , for inflating the invoice

value as part of the modus-operandi. This is evident from the foregoing

discussions and more particularly from the manner in which Agreements

have been signed obliterating distinction between PMC and EIF.

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(ii) Goods were supplied directly to India by respective OEMs. Though it was

a direct supply and three entities viz. HHICL (OEM), PMC and EIF had

bid as a consortium based on which contract for supply of goods was

given to the consortium, on paper the transaction was split as between

OEM(HHICL)---> EIF---> PMC for invoicing with fraudulent intent of

siphoning off of money from India, by inflating the value on paper in the

2nd stage (EIF---> PMC ). Interestingly, two employees of PMC Shri

Jaydev Mishra and Shri Dharmesh Parekh – (Senior and sub-ordinate)

have signed both the Contracts- First stage i.e.OEM(HHICL)--->

EIFsigned by Dharmesh Parekh for & behalf of EIF and second stage i.e.

EIF--->PMC signed by Jaydev Mishra for PMC. It applies, mutatis

mutandis, to the other OEMs (Dalian, Sediver and Suzhou) and the

goods supplied by them.

(iii) The contract for supply of goods between OEMs (HHICL, Sediver

andDalian) and the intermediary invoicing agent i.e.EIF was signed by an

employee of PMC (Shri Dharmesh Parekh) that too in India- thus not only

obliterating distinction between PMC and EIF (the so called buyer –

seller), but also rendering the contracts so executed, invalid and non-est.

(iv) Without prejudice to the above, since EIF and PMC are related to each

other and the declared value is not acceptable as the Transaction Value

as per the Customs Valuation (Determination of value of Imported goods)

Rules,-2007 (in short the CVR’ 2007)read with Section 14 of the Customs

Act, 1962.

(v) Further, they (PMC & EIF) had together (alongwith HHICL) signed a

Consortium Agreementon 16-10-2010. The said Consortium Agreement

was signed on behalf of PMC and EIF by two employees of PMC (senior

and sub-ordinate duo of Shri Jaydev Mishra and Shri Dharmesh

Parekh). Further, supply agreement between EIF and OEMs were also

signed by Shri Dharmesh Parekh on behalf of EIF. All these, not only

obliterate the distinction between PMC and EIF, but also establish

commonality of interest.

(vi) OEM value has been traditionally recognised as the more authentic value

which is recognised in law. Rule 11 of the CVR-2007 lists manufacturer’s

invoice as a relevant document for determination of the value of the

imported goods, particularly when goods are imported from or through a

person other than the manufacturer or producer. The text of Rule

11,ibid, is extracted below for ease of reference -

“Rule 11 .Declaration by the importer.---(1) The importer or his agent shall

furnish –

(a) A declaration disclosing full and accurate details relating to the

value of imported goods; and

(b) Any other statement, information or documents including an

invoice of the manufacturer or producer of the imported goods

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where the goods are imported from or through a person other

than the manufacturer or producer, as considered necessary by

the proper officer for determination of the value of imported

goods under these rules”.

Thus, the transaction between EIF and PMC, being apparently a sham

transaction for reasons set out above, the same is,therefore,liable to be rejected under

the provisions of Rule 12 of the CVR, 2007.Rule 11 of the Rules, prescribes various

documents required for ascertaining correctness of the declared value. One of the

prescribed documents is manufacturer’s invoice. Rule 4 of theCVR-2007 provides that

subject to the provisions of Rule 3, the value of the imported goods shall be the

Transaction Value of identical goods sold for export to India and imported at or about

the same time as the goods being valued. In the present case, the goods in question

themselves have been shown as sold to the intermediary invoicing agent i.e EIF but

have been directly shipped to India by the OEMs. EIF has merely acted as an

intermediary invoicing agent for inflating the invoice. Thus, the invoice value of the

manufacturer (OEM) appears to be the actual value of goods. Rule 4 refers to value of

identical goods being sold for export to India and imported at or about the same time.

The ambit of identical goods covers same goods as well, being identical in all respects.

Therefore, the price available in such OEM invoices appears to be the actual

Transaction Value of the same goods (Identical goods-Rule 4)-being the same set of

goods, covered by two different sets of invoices.It is obvious that there is no material

difference of any kind in description, quantity, make, or the manufacturer.Therefore,

the value is required to be re-determined under the provisions of Rule 4 of the CVR,

2007 read with Section 14 of the Customs Act, 1962.

15.4 Thus, the declaredvalues in the impugned 57 bills of entry in total

amounting to Rs. 1887,06,49,088/-(CIF)declared on the basis of inflated invoice

prices of the intermediaryinvoicing agentEIF, do not represent actual value of the

goods as has been brought out by the investigation, as set out above, and the said

declared assessable value is required to be rejected under the provisions of Rule 12 of

the CVR, 2007 and re-determined under the provisions of Rule 4 of the CVR-2007

read with Section 14 of the Customs Act, 1962, on the basis of price available in the

back-to-back OEM invoices raised on the intermediary invoicing agent i.e. EIF.

Accordingly, the aggregate re-determined CIF value of the goods imported against the

57 bills of entry works out to Rs. 393,21,76,604/-(CIF)as worked out incolumns K of

Annexure A, on the basis of prices in OEM invoicesas against the declared CIF of Rs.

1887,06,49,088/-(CIF).The quantum of over-valuation arising out of the back-to-back

inflated invoicing by the intermediary-EIF on PMC, is shown incolumn N of Annexure

A, which works out to Rs.1493,84,72,484/-(Rupees One thousand four hundred

and ninety three crores, eight four lakhs, seventy two thousand fourhundred

eight fouronly)whichappears to have been siphonedoffout of

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India by MEGTPCL through PMC to their overseas intermediary invoicing agentand

related entity EIF, on account of invoice inflation, in the guise of outward remittances

as consideration for the imports.

16.0 RELEVANT LEGAL PROVISONS

16.1 The legal provisions relevant to the present proceedings are :-

i) Various provisions of the Customs Act, 1962 as mentioned

in the notice

ii) The Customs Valuation (Determination of Value of Imported

Goods) Rules 2007 (The CVR-2007)

iii) The Foreign Trade (Development & Regulation) Act, 1992

(The FTDR)

iv) The Foreign Trade (Regulation) Rules, 1993

Some of the specific provisions with particular relevance to the instant case are

discussed below:-

16.2 Section 46 of the Customs Act, 1962 provides for filing of Bill of

entry upon importation of goods, which casts a responsibility on the importer

to declare truthfully, all the contents in the bill of entry. Relevant portion of

Section 46 i.e. sub-section (4) thereof is reproduced below for ease of reference

:-

“(4) The importer while presenting a bill of entry shall

at the foot thereof make and subscribe to a declaration as

to the truth of the contents of such bill of entry and shall,

in support of such declaration, produce to the proper

officer the invoice, if any, relating to the imported goods

x xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx”

16.3 Section 111 of the Customs Act provides for confiscation of

improperly imported goods. The relevant sub-sections (d) and (m) are

reproduced below:-

“111. Confiscation of improperly imported goods, etc.-

The following goods brought from a place outside India shall be

liable to confiscation:-

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xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

(d) any goods which are imported or attempted to be

imported or are brought within the Indian customs

waters for the purpose of being imported contrary to any

prohibition imposed by or under this Act or any other

law for the time being in force;

x xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

(m) any goods which do not correspond in respect of value

or in any other particular with the entry made under

this Act or in the case of baggage with the declaration

made under section 77 in respect thereof, or in the case

of goods under transhipment, with the declaration for

transhipment referred to in the proviso to sub-section (1)

of section 54;

x xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx”

Since the actual value of imported goods do not correspond with the

declared value of the goods in the Bills of Entry (which were grossly over-

valued) the said goods appear liable for confiscation under Section 111(m) of

the Customs Act, 1962.

Confiscation under Section 111(d) is discussed later.

16.4 Section 112 of the Customs Act, 1962 provides for improper

importation of goods etc.; while 112 (a) and (b) provide for situations, the sub-

sections (i) to (v) provide extent of penalty. Section 112 (iii) provides for penalty

in the case of import over-valuation, relevant text of which is reproduced

below:-

“112.Penalty for improper importation of goods, etc. –

Any person, -

(a) who, in relation to any goods, does or omits to do any

act which act or omission would render such goods lia-

ble to confiscation under section 111, or abets the doing

or omission of such an act, or

(b) who acquires possession of or is in any way con-

cerned in carrying, removing, depositing, harbouring,

keeping, concealing, selling or purchasing, or in any

other manner dealing with any goods which he knows

or has reason to believe are liable to confiscation under

section 111,

shall be liable, -

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x xxxxxxxxxxxxxxxxxxxxxxxxxxxx

(iii) in the case of goods in respect of which the value

stated in the entry made under this Act or in the

case of baggage, in the declaration made under sec-

tion 77 (in either case hereafter in this section re-

ferred to as the declared value) is higher than the

value thereof, to a penalty not exceeding the differ-

ence between the declared value and the value

thereof or five thousand rupees, whichever is the

greater

x xxxxxxxxxxxxxxxxxxxxxxxxxxxxx”

From the above specific provision of quantum for imposition of penalty in case

of import over-valuation of goods, it is clear that law specifically seeks to

penalise the over-valuation of the imported goods.

16.5 Section 114AA of the Customs Act, 1962 deals with penalty for use

of false and incorrect material. The relevant provision is reporoduced below:

“114AA. Penalty for use of false and incorrect material. –

If a person knowingly or intentionally makes, signs or uses, or

causes to be made, signed or used, any declaration, statement or

document which is false or incorrect in any material particular, in the

transaction of any business for the purposes of this Act, shall be

liable to a penalty not exceeding five times the value of goods.

In the instant case documents, particularly invoices have been manipulated

for the purpose of over-valuation of imported goods. Further false and incorrect

declarations/statements have been made in the import documentation.

16.6.1 As per Rule 11 of the Foreign Trade (Regulation) Rules, 1993,

inter-alia on the importation into any customs port of any goods, whether liable

to duty or not, the owner of such goods shall in the bill of entry prescribed

under the Customs Act, 1962 state the value, among others of such goods to

the best of his knowledge and belief and shall subscribe a declaration to the

truth of such statement at the foot of such bill of entry.

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16.6.2 Further, as per Rule 14(1) of the Foreign Trade (Regulation) Rules,

1993, no person shall make, sign, or use or cause to be made, signed or used

any declaration, statement or document for the purpose of, inter-alia,

importing any goods knowing or having reasons to believe that such

declaration, statement or document is false in any material particulars.

Further, as per Rule 14 (2), ibid, no person shall employ any corrupt or

fraudulent practice for the purpose of, inter-alia, importing any goods.

16.6.3 In this case, value of the imported goods has been over-stated by

the importer for the purpose of siphoning off money from India to their related

entities overseas. The importer and owner of the imported goods has thus

declared value which to the best of their knowledge and belief was incorrect

and was over-stated, as brought out here-in-above. They have also subscribed

a declaration of the truth regarding the statement of value which declaration

appears to be false due to over-valuation of the goods. Also, the importer has

made, signed and used and/or caused to be made, signed and used the

declaration, statement and invoices of EIF for the purpose of importing the

goods knwong or having reasons to believe that such declarations, statement

and invoice were false in respect of the value stated therein. Further, the

importer has employed corrupt or fraudulent practice of over-valuation for the

purpose of importing the impugned goods.

16.6.4 Therefore, the importer appears to have violated the restrictions

and prohibitions as per Rules 11 and 14 ibid. It is a settled point of law that

any restriction is also a prohibition.

16.6.5 In view of the overvaluation of the imported goods as a past

planned modus operandi for siphoning off money abroad as discussed above, it

appears that MEGPTCL - the owner, through its Contractor PMC, have

imported good by declaring the value, which they knew that was not true and

thus imports were effected contrary to the prohibition imposed under the

Foreign Trade (Regulation) Rules, 1993 made under Section 19 of the FTDR

1992. Therefore the imported goods are also liable for confiscation under

Section 111(d) of the Customs Act, 1962(in addition to Section 111(m) as

discussed elsewhere) and the importer is liable to penalty under Section 112(a)

of the Customs Act, 1962.

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17.0 SUMMARY OF INVESTIGATION

17.1 From the investigations, as brought out in the foregoing paragraphs,

MEGPTCL;EIF; PMC; Shri Vinod ShatilalAdani; Shri Jatin Shah, Shri MiteshDani,Shri

MehulJaniof EIF and Shri Dharmesh Parekh & Shri Jaydev Mishra of PMC, appear to

have hatched a conspiracy to siphon off money abroad by way of indulging in over-

valuation in imports for projects subject to low or nil rateof Customs duty, so that

the incidence/burden of duty on the over-valued amount i.e cost of fund transfer is

minimal.

17.2 On the overseas front, MEGPTCL appears to have engaged the services of

a closely related party EIF to arrange for procurement from various OEMs for eventual

supply to M/s PMC Projects (India) Private, another firm managed and controlled by

the Adani Group. M/s Electrogen Infra FZE, UAE acting as a front for PMC and

MEGPTCL, appears to have acted as an intermediary invoicing agent to inflate the

invoice value in procurement of equipments and machinery required for installation in

the transmission line system from respective South Korean and Chinese OEMs. As a

part of the modus-operandi, though the goods were shipped directly to

PMC/MEGPTCL in India by the overseas suppliers who were OEMs, but for enabling

inflation of invoices, it was made to appear on paper as if the goods are being supplied

by EIF. Accordingly, back-to-back contracts were signed between PMC (the contractor

for MEGPTCL) and EIF, UAE in one hand and EIF, UAE and the four OEMs in the

other. But the facts that the back-to-back contracts of EIF with OEMs were signed in

India, that too by Shri Dharmesh Parekh, an employee of PMC, clearly shows that the

said supply contracts were planned, conceived and executed in India by same set of

persons and that it was a sham transaction.

17.3 The value inflation over the contract price of one of the OEM M/s

Hyundai Heavy Industries Co. Ltd., South Korea with Electrogen Infra FZE, UAE in the

back-to-back supply agreement executed by Electrogen Infra FZE, UAE with PMC

Projects (India) Private Limited, clearly shows the contract level variation of about

400% as depicted in Table-5, supra, which is reproduced below :-

(Table-5)

Contract Price comparison: PMC-EIF vis-à-vis EIF-HHICL

Particulars Amt. in US $

a) Price : PMC EIF, UAE Value as per agreement no. 415703 dated 01-10-2010 between M/s Electrogen Infra FZE and M/s PMC Projects (India) Private Limited

260,269,798

b) Price : EIF, UAE HHICL

Value as per agreement no. 700003 dated 05-10-2010 between M/s Hyundai Heavy Industries Co. Ltd. , South Korea and M/s Electrogen Infra

65,328,309

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FZE, UAE

DIFFERENCE 194,941,489

(a) as % of (b) 398%

17.4 In so far as the scope of supplies of Auto Transformers, Shunt Reactors

and spares thereof is concerned (excluding Disc Insulators and OPGW), two of the

employees of the Adani Group viz. Shri Mayur Shah, ex-employee of PMC and Vice

President of M/s Adani Ports & SEZ Limited and Shri Jaydev Mishra, Associate

General Manager of PMC have admitted to the identical scope of supply in both the

above agreements, during course of their statements recorded under Section 108 of

the Customs Act, 1962 on 17-02-2014, thereby lending direct credence to the

corresponding values depicted in the Table above and the back-to-back nature of the

two contracts. EIF proceeded to raise inflated invoices from time to time on PMC under

the contract no. 415703 dated 01-10-2010 inflation being to the tune of about 400%

of OEM value.

17.5 In so far as supply of Disc Insulators and OPGW fiber, hardware and

accessories are concerned, investigations have clearly brought out the back-to-back

nature of the sale contracts as narrated in above. The overall contract level over-

valuation is depicted in the Table-14 supra, which is reproduced below:-

(Table-14)

Contract Price as per Agreements between PMC & EIF vis-à-vis the Agreements

between EIF & three OEMs (Sediver, Dalian & Suzhou)

S.No Description of goods Price as per Agreement No.

415703/ 01-10-2010 as per

break-up given at Schedule 1

Price Schedule Summary

Sheet (USD)

Price as per

OEM

Agreements

(USD)

Difference

(USD)

C as % of D

(A) (B) (C) (D) (E) (F)

1. Disc Insulators (120 KN

+ 210 KN)

Sub-total of C

(C.I + CII)

83,794,854 11,876,920.2 71,917,933.8 705.53%

2 Optical Fiber Ground

Wire with hardware and

accessories

Sub-total D 32,131,000 2,637,757 29,495,243 1218.12%

17.6 Investigations have clearly brought out that for every procurement

invoice raised on M/s Electrogen Infra FZE, UAE by the respective OEM, M/s

Electrogen Infra FZE in turn have arranged to raise and issue a back-to-back invoice

on M/s PMC Projects (India) Private Limited, wherein they have inflated the OEM price

commensurate with the average contract level value inflation and invoiced the goods at

inflated prices.M/s PMC Projects (India) Private Limited arranged for the importation

and clearance of the goods on the strength of the inflated invoices, showing prices

which did not represent the actual value of the goods. As per arrangement, the goods

were directly shipped from the load ports in South Korea and China, to ports in

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India,from they were eventually cleared by M/s PMC Projects (India) Private Limited

for use in the project. Since the goods have been directly shipped from the load ports

in South Korea &China and utilised directly for the purpose of installation in the

transmission system, there appears to have been no value-addition to the goods at any

point of time from the time of their shipment from the overseas load ports till their

installation in India.Therefore, value addition in the form of value inflation of about

400% (average)towards the supply of goods procured from Hyundai Heavy Industries

Co. Ltd. and about 800% (average) in the case of supply of goods procured from other

OEMsviz. M/s Dalian Insulator Group Co. Ltd., M/s Sediver Insulators (Shanghai) Co.

Ltd. and M/sSuzhou Furukawa Power Optic Cable Co.Ltdappearsarbitrary and

unrealistic. MEGTPCL appears to have arranged for remittances to M/s Electrogen

Infra FZE, UAE towards the inflated prices in invoices raised by it, thereby enabling

extra remittances to their related entity M/s Electrogen Infra FZE.

17.7 The manner in which Consortium Agreement and the Supply Agreements

for and on behalf of EIF, UAE were signed by employees of PMC obliterates the

distinction between PMC &EIF and establishes commonality of their interest. They

appear to have acted as per a planned modus-operandi to siphon off money from India

by inflating invoices.

17.08 MEGTPCL, being a wholly owned subsidiary of Adani Enterprises

Limited, the listed flagship company of the Adani Group, through PMC appears to

have made extra remittances to the extent of the inflated amountsto the tune of nearly

Rs. 1493,84,72,484/- which appears to have been siphoned off abroad to and for the

benefit of their related party M/s Electrogen Infra FZE, UAE, in the guise of import

remittances by resorting to gross over-valuation of the imported goods.M/s Electrogen

Infra FZE on its part, therefore,appears to have actively connived with MEGTPCL and

PMC by arranging to raise invoices with inflated prices, being fully aware that the price

charged in its invoices had been grossly over-valued and did not represent actual

value of the goods at any point of time.

17.9 At the time of clearance of goods imported under 57 Bills of entry

mentioned in Annexure A, MEGTPCL, through PMC, arranged for presentation of the

inflated invoices of EIFto the customs authorities, on the basis of which they declared

value of the goods. The importer held out that the value declared therein represented

the Transaction Value paid or payable for the goods imported, being fully aware that

the value declared by them on the strength of inflated invoices raised by EIF did not

represent the actual value of the goods. Investigations have clearly brought out that

EIF has all along only acted as front for inflating the invoice value as part of the

modus-operandi. The admitted fact that an employee of PMC (Shri Dharmesh Parkeh)

signed agreements between EIF and the OEM, for and behalf of the overseas entity

EIFfortifies the allegation that EIF is only a front created by the Adani Group for

intermediary invoicing.Scanned image of relevant portions of the three contracts

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executed between EIF and the three OEMs showing the signature of Dharmesh Parekh

on behalf of EIF is given below :-

Contract Signed between EIF and Hyundai Heavy Industries Co. Ltd.

Contract signed between EIF and Sediver Insulators (Shanghai) Co. Ltd.

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Contract signed between EIF and Dalian Insulator Group Co. Ltd.

In effect, therefore, it would only be reasonable to infer that PMC,on behalf of

MEGPTCL, itself has entered into and executed two distinct sets of contracts with

differing consideration amounts, for the same set of goods;one set of contracts entered

into and executed by them with EIFwith inflated consideration amounts and the other

entered into and executed with respective OEMs, through their employee Dharmesh

Parekh, for consideration amounts which represented the actual Transaction Value of

the goods. Therefore, being privy to the procurement price of the goods through their

employee Shri Dharmesh Parekh, PMC were aware at all material times that the price

shown in the invoices raised by the front created by the Adani Group i.e. EIF, was

value inflation on paper and did not represent the actual price of the goods, for

reasons set out above.

17.10 A chart summarising the relationship between various contracts

pertaining to the goods imported by MEGPTCL through PMC for the transmission line

project from various OEMs with invoices routed through Electrogen Infra FZE, UAE is

shown below: -

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The chart clearly brings out the sham nature of the transactions between the

intermediary and PMC.

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17.11 Section 111(m) of the Customs Act, 1962 provides, inter-alia, that any

goods which do not correspond in respect of value or in any other particular with the

entry made under this Act are liable to confiscation. In the present case, the actual

value of the goods is forthcoming in the back-to-back invoices raised by various OEMs

on M/s Electrogen Infra FZE, being the procurement price paid by it, whereas the

invoices raised by M/s Electrogen Infra FZE on back-to-back basis on M/s PMC

Projects (India) Private Limited contain the inflated prices, arbitrarily raised, which do

not represent the actual value of the goods. The provisions of Section 111(m) are

squarely applicable in the present case, as the MEGPTCL through M/s PMC Projects

(India) Pvt. Ltd. , have produced inflated invoices to the custom authorities on the

strength of which the goods appear to have been assessed and cleared. The fact

regarding the actual prices being available in the procurement invoices of M/s

Electrogen Infra FZE, UAE, has been suppressed from jurisdictional customs

authorities in India with a view to facilitate the over-invoiced clearances. Accordingly,

the goods imported and cleared under 57 bills of entry having aggregate value of Rs.

1887,06,49,088/- crores (CIF)as detailed in the Annexure to Order dated 14-05-

2014 (RUD/D-76) issued under proviso to Section 110 (1) of the Customs Act, 1962 to

the owner M/s MEGTPCL and the importer M/s PMC Projects (India) Private Limited,

were seized under proviso to Section 110(1)of the Customs Act, 1962 with specific

directions that they should not remove, part with, or otherwise deal with the goods

except with the previous permission of the proper officer.

18.0 MEGPTCL- the Actual Importer

It is an admitted fact that MEGPTCL have categorically held themselves out to

be the importer, as is evident from categorical submissions made by them to this effect

in the various letters addressed to different government departments viz. the Principal

Secretary, (Energy)Industries, Energy and Labour Department, Government of

Maharashtra and the Commissioner of Customs, Kandla Custom House, from time to

time. They have also stated that they would be importing goods through M/s PMC

Projects (India) Private Limited, thereby implying that PMC Projects (India) Private

Limited would be filing bills of entry for the goods imported on their behalf. It is also

an admitted fact that they are the holders of Transmission Licence and beneficiary for

the monthly tariff fixed for utilizing the transmission of power through their

transmission lines. The project cost incurred by MEPGTCL appears to have been

funded on a 70:30 debt-equity ratio, with 70% capital costlent by Bank of India &ICICI

Bank and final sanction letter issued by State Bank of India &ICICI Bank Limited.

MEGTPCL has also assigned the transmission licence in favour of the Security

Trustee acting on behalf of Project lenders i.e M/s SBI Cap Trustees Co Ltd.In the

Purchase Order placed by MEGPTCL on M/s PMC Projects (India) Private Limited,

they have referred to themselves as the ‘Owner’ while referring to PMC Projects

(India) Private Limited as the ‘contractor/supplier’.MEGPTCL, therefore, appears

to be owner of the transmission facility and so also of the goods imported by them

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through PMC Projects (India) Private Limited installed as part of the said facility. As

per Section 2 (26) of the Customs Act, 1962, an importer in relation to any goods at

any time between their importation and the time when they are cleared for home

consumption, includes any owner or any person holding himself out to be importer. In

view of MEGPCL being the owner of the facility and in view of its holding itself to be

the importer, before the jurisdictional Customs authorities for the purpose of availing

concessional rate of duty under Project Import, it appears that MEGPTCL is the de-

facto importer though Bills of Entry have been filed by PMC by arrangement. Further

as discussed earlier, remittances against import of goods from EIF have been directly

from the account of MEGPTCL against transferable Letters of Credit. Payments for

imports have not been made by PMC to EIF-the intermediary against their invoices

though theinvoices were raised on PMC. The fact that the remittances for the imports

were made directly from the accounts of MEGPTCL to EIF also corroborates the facts

that MEGPTCL is the owner and the actual importer of the goods.

19.0 ROLES FOR PENALTY

19.1 From the foregoing investigations, it appears that MEGPTCL, PMC

Projects (India) Private Limited and M/s Electrogen Infra FZE, UAE,various related

entities of Adani Group;Shri Vinod ShatilalAdani @ Vinod Shantilal Shah; Shri Jatin

Shah; Shri MiteshDani& Shri MehulJani of EIF;ShriDharmesh Parekh and Shri

Jaydev Mishra of PMC, conspired between themselves to execute the planned

conspiracy of siphoning off foreign exchange abroad to and for the benefit of their

related entity. M/s Electrogen Infra FZE, UAE, appears to have been created as a front

for siphoning off of money inthe guise of outward remittancesfor over-valued imports,

by indulging in invoice inflation. In their above act of conspiracy, they were aided and

abetted by Shri Vinod Shatilal Adani; Shri Jatin Shah; Shri Mitesh Dani&Shri Mehul

Jani of EIF and Shri Dharmesh Parekh &Shri Jaydev Mishra of PMC.

19.2. EIF - the created UAE based intermediary, on their part, knowingly and

intentionally arranged for supply of goods to MEGTPCL through PMC Projects (India)

Private Limited by raising invoices depicting grossly inflated prices, which did not

represent the actual price of the goods. EIF were aware at all material times that

actual price of the goods were available in the invoices raised on them by various

OEMs , and they had made remittances as per the prices shown in the OEM invoices

against procurements from the respective OEM. Interestingly, the contract for supply

of goods, between EIF and OEM (HHICL) was signed in India by an employee of PMC,

thus obliterating distinction between PMC and EIF. M/s Electrogen Infra FZE, UAE

and PMC,therefore, appear to be hand-in-glove for the arbitrary value inflation of

goods supplied to MEGTPCL through M/s PMC Projects (India) Private Limited.

MEGPTCL, by virtue of direct and close relationship with the intermediaryinvoicing

agentEIFand common business interest, also appear to have proceeded to import and

clear goods through PMC Projects (India) Private Limited, by producing inflated

invoices raised by EIF to the customs authorities at the time of clearance,being fully

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aware that the goods imported by them had been over-invoiced and value declared on

the basis of the EIF’s invoice pricesdid not represent actual value of the goods. PMC

Projects (India) Private Limited acted as a conduit and appears to have actively

connived with the owner, MEGPTCL and the invoicing intermediary EIFin their

objective of siphoning off foreign exchange by resorting to over-valuation by filing bills

of entry and arranging for clearance of goods. MEGTPCL, EIF and M/s PMC Projects

(India) Private Limited have in relation to the goods imported and cleared under bills of

entry detailed atAnnexure-A to this notice , have done acts, or omitted to act or have

abetted the commission or omission of the said acts, which appear to have rendered

the goods of declared value of Rs. 1887,06,49,088/- CIF (Assessable value of Rs.

1905,93,55,579/-)liable to confiscation under Section value 111(d) and Section

111(m) of the Customs Act, 1962.Consequently, MEGTPCL, Electrogen Infra FZE,UAE

and M/s PMC Projects (India) Private Limitedappear to have rendered themselves

liable to penalty under Section 112 (a) & (b) and 114 AA of the Customs Act, 1962.

19.3 Shri Jatin Shah (ex-employee of the Adani Group) and Director of

overseas supplier M/s Electrogen Infra FZE, UAE; Shri Mitesh Dani&Shri Mehul Jani,

both Indian nationals and employees of EIF, under the influence and guidance of Shri

Vinod Shantilal Adani, appear to have indulged in raising invoices on M/s PMC

Projects (India) Pvt. Ltd. for supply of goods to MEGPTCL, knowing fully well that price

charged in such invoices did not represent the actual value of the goods. Such

invoices have been raised and issued under the signature of one of the above named

three employees of M/s Electrogen Infra FZE, UAE from time to time. Despite,

repeated summons issued in their name seeking their presence with documents

(procurement invoices raised on Electrogen Infra FZE, UAE by various OEMs), they

appear to have deliberately avoided presenting themselves before the DRI to co-operate

with the on-going investigations, on one plea or the other. Shri Jatin Shah, Shri

Mitesh Dani, and Shri Mehul Jani, led by Shri Vinod Shantilal Adani, have done acts,

or omitted to act or have abetted the commission or omission of the said acts, which

appear to haverendered the goods of declared value of Rs. 1887,06,49,088/- CIF

(Assessable value of Rs. 1905,93,55,579/-)liable to confiscation under 111(d) and

Section 111(m) of the Customs Act, 1962. They have been signatories to contractual

documents/agreements with inflated consideration as well as to inflated invoices

raised from time to time on PMC, knowing full well that the contract consideration

and/or invoice price did not represent the actual value of the goods on account of

being privy to OEM contract price/OEM invoices showing actual Transaction Value.

Consequently, Shri Vinod Shantilal Adani,Shri Jatin Shah, Shri Mitesh Dani, and Shri

Mehul Jani appear to have rendered themselves liable to penalty under Section 112

(a)& (b) and under Section 114AA of the Customs Act, 1962.

19.4 Shri Jaydev Mishra, Associate General Manager, and Shri Dharmesh

Parekh, Senior Manager, both employees of M/s PMC Projects (India) Private Limited,

sharing a senior-subordinate relationship between them within the company, who

were also ex-employees of the Adani Group,appear to have aided and abetted in above

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modus-operandi of siphoning off money by invoice inflation of imported goods. Shri

Dharmesh Parekh, having admittedly signed the three Agreements by and between

M/s Electrogen Infra FZE, UAE and each of the three OEMs viz. M/s Hyundai Heavy

Industries Co. Ltd. , South Korea; M/s Dalian Insulator Group Co. Ltd. and M/s

Sediver Insulators (Shanghai) Co. Ltd. appears to have been fully aware of the

consideration mentionedtherein and thereby the actual prices of the goods. As

signatory to the Consortium Agreement and Power of Attorney for Lead Member, both

dated 16-08-2010, he appears to be aware of the purpose and objective thereof. As a

signatory (as a witness) to the back-to-back supply agreement bearing No. 415703

dated 01-10-2010, between M/s Electrogen Infra FZE and PMC Projects (India) Pvt.

Ltd., he appears to have been aware of the scope of supply covered therein as well as

the consideration amount, the agreement also having been signed by his superior Shri

Jaydev Mishra, on behalf of M/s PMC Projects (India) Private Limited. Thus, in his

capacity as signatory to the various agreements/contracts, it is evident that Shri

Dharmesh Parkeh was aware at all material times that the scope of supply &

description of goods covered in the four agreements between the OEMs and Electrogen

Infra FZE, UAE, were identical to the scope of supply and description of goods covered

in the single back-to-back agreement bearing No. 415703 dated 01-10-2010 executed

between M/s Electrogen Infra FZE, UAE and M/s PMC Projects (India) Private

Limited.Therefore, he was aware of the consideration covered by the two sets of

agreements :- (i) between EIF and OEMs(ii) the corresponding back-to-back agreement

between EIF and PMC-each such agreement having been signed by him and so also

about the substantial difference in the agreement values/consideration covered by the

two sets of agreements for identical scope of supply & description of goods. It follows

that Shri Jaydev Mishra, as his superior, and signatory to the Agreement 415703

dated 01-10-2010, as a controlling officer of his sub-ordinate Shri Dharmesh Parekh,

also appears to be fully aware about the substantial difference in the agreement

values/consideration covered by the two sets of agreements for identical scope of

supply & description of goods. On being shown a copy of theAgreement No. 700003

dated 5th October 2010 between M/s Electrogen Infra FZE, UAE and M/s Hyundai

Heavy Industries Co. Ltd. , South Korea, which his sub-ordinate had signed for and

behalf of M/s Electrogen Infra FZE, UAE, he,inter-alia,categorically admitted to his

sub-ordinate Shri Dharmesh Parekh having signed the said Agreement no. 700003

dated 05-10-2010 for and on behalf of M/s Electrogen Infra FZE, UAE in capacity of

authorized signatory. Therefore, Shri Jaydev Mishra in his capacity as a superior to

Dharmesh Parekh, also appears to have been fully aware of substantial difference in

the agreement values/consideration covered by the two sets of agreements for

identical scope of supply & description of goods. Yet, they proceeded to allow the

concerned officials in their company M/s PMC Projects (India) Private Limited to file

bills of entry on behalf of MEGPTCL and have the goods cleared on the strength of

inflated invoices raised in conformity with inflated consideration covered by agreement

no. 415703 dated 01-10-2010. Therefore,Shri Jaydev Mishra, Associate General

Manager, and Shri Dharmesh Parekh, Senior Manager of M/s PMC Projects (India)

Private Limited have done acts, or omitted to act or have abetted the commission or

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omission of the said acts, which appear to haverendered the goods of declared value of

Rs. 1887,06,49,088/- CIF (Assessable value of Rs. 1905,93,55,579/-)liable to

confiscation under 111(d) and Section 111(m) of the Customs Act, 1962. In view of

their superior-sub-ordinate relationship, they were aware at all material times that the

consideration amount agreed by and between EIF and PMC was an inflated one and

not based on actual Transaction Value of the goods. Yet they proceeded to sign

contractual documents as shown in Table-18.Consequently, Shri Jaydev Mishra,

Associate General Manager, and Shri Dharmesh Parekh, Senior Manager of PMC

appear to have rendered themselves liable to penalty under Section 112 (a) & (b) and

Section 114AAof the Customs Act, 1962.

20. Out of the 57 consignments, (26 at merit rate of duty and 31 on

concessional rate of duty under heading 98.01) covered at Annexure A to this show

cause notice, two consignments(740818/03-03-2011& 9871984/16-04-2013)have

been cleared through Nhava Sheva and the remaining 55 consignments have been

cleared through Mundra Sea port. The adjudicating authority for the imports effected

through NhavaSheva Port is the Commissioner of Customs, ( Import), Jawahar Lal

Nehru Custom House, NhavaSheva, TalukaUran, District Raigad, Maharashtra-

400707, and for the imports effected through Mundra Port is the Commissioner of

Customs, Custom House, Kandla, having his office having his office near Balaji

Temple, Kandla-370210.

21. Now, therefore, M/s MEGPTCL; M/s PMC Projects (India) Private

Limited; M/s Electrogen Infra FZE, UAE;, Shri Vinod ShantilalAdani @Vinod Shantilal

Shah; Shri Jatin Shah, Shri MiteshDani& Shri MehulJani - all

employees/representatives of EIF; and Shri Jaydev Mishra, Associate General Manager

& Shri Dharmesh Parekh, Senior Managerof M/s PMC Projects (India) Private Limited

are hereby called upon to show cause,within 30 days of receipt of this notice,to the

respective adjudicating authorities as under :-

(A) With respect to goods imported through Mundra Port (i.e 55

consignments - Sr.No. 1 to 44, Sr.No. 46 and Sr.Nos. 48 to 57) to the Commissioner

of Customs, Custom House, Kandla, having his office near Balaji Temple, Kandla-

370210

(I) M/s PMC Projects (India) Private Limited,the importer on record (as per

Bills of Entry); and MEGPTCL who are the owner of imported goods and who have held

themselves out as importer,are required to show cause as to why :-

i) the declared value (transaction value based on sham transaction between

EIF and PMC) in respect of equipments & machinery imported under 55

bills of entry having cumulative declared value of Rs. 1867,24,06,746/-

(CIF)(individual bill of entry-wise CIF valueshown under column E of

Annexure A) should not be rejected under Rule 12 of the Customs Valu-

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ation (Determination of Prices of Imported Goods) Rules, 2007 read with

Section 14 of the Customs Act, 1962.

ii) the declared value in respect of equipments & machinery imported under

55 bills of entry listed, at Annexure A,should not be re-determined cu-

mulative as Rs. 390,15,34,182/-(CIF)(individual bill of entry-wise CIF

valueshown under column K of Annexure A)on the basis of actual

Transaction Value available in the OEM invoice prices shown at column

J thereof, in terms of Rule 4 of the CVR,2007 read with Section 14 of the

Customs Act, 1962.

iii) Goods covered by 55 bills of entry, having aggregate declared value of Rs.

1867,24,06,746/-(CIF),as detailed at Annexure A to this notice, import-

ed & cleared in pursuance of Agreement No. 415703 dated 01-10-2010

by PMC, for and on behalf of the owner M/s MEGPTCL,seized under Or-

der dated 14-05-2014 issued under proviso to Section 110(1) of the Cus-

toms Act, 1962 should not be confiscated under 111(d) and Section

111(m) of Customs Act, 1962.

iv) Penalty under Section 112 (a) & (b)of the Customs Act, 1962 should not

be imposed on each one of them in relation to the above goods.

v) Penalty under Section 114AA of the Customs Act, 1962 should not be

imposed on them.

II) M/s Electrogen Infra FZE, UAE; Shri Vinod Shantilal Adani @Vinod

Shantilal Shah and Shri Jatin Shah, Shri Mitesh Dani and Shri Mehul Jani, all

employees of M/s Electrogen Infra FZE, UAE are required to show cause to the

adjudicating authority as to why penalty under Section 112 (a) & (b) and Section 114

AA of the Customs Act, 1962 should not be imposed on each one of them in relation to

the goods imported under the 55 Bills of entry.

III) Shri Jaydev Mishra, Associate General Manager, andShri Dharmesh

Parekh, Senior Manager, both employees of M/s PMC Projects (India) Private Limited,

are required to show cause to the adjudicating authority as to why penalty under

Section 112 (a) &(b) and Section 114AA of the Customs Act, 1962 should not be

imposed on each one of them in relation to above goods imported under 55 Bills of

entry.

(B) With respect to goods imported through Nhava Sheva Port, (i.e

twoconsignments - Sr.No. 45 and 47 of Annexure A) to the Commissioner of Customs,

Commissioner of Customs, (Port Import), Jawahar Lal Nehru Custom House,

having his office at Nhava Sheva, Taluka Uran, District Raigad, Maharashtra-400707

:-

(I) M/s PMC Projects (India) Private Limited,the importer on record (as per

Bills of Entry); and MEGPTCL who are the owner of imported goods and who have held

themselves out as importer are required to show cause as to why :-

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i) the declared value (Transaction Value based on sham transaction between

EIF and PMC) in respect of equipments & machinery imported under the two

bills of entry (Sr.No. 45 & 47 of Annexure A) having cumulative declared

value of Rs. 19,82,42,342/-(respective bill of entry-wise value shown at

sr.No. 45 & 47 of column E of Annexure A),should not be rejected under the

provisions of Rule 12 of the CVR, 2007 read with Section 14 of the Customs

Act, 1962.

ii) the declared value in respect of equipments & machinery imported under

two bills of entry (Sr.No. 45 and 47 of Annexure A) should not be re-

determined cumulatively as Rs.3,06,42,423/- CIF (respective bill of entry

wise value as shown at Sr.No.s. 45 and 47 of column K) on the basis of ac-

tual transaction value available in the OEM invoice price shown at column J

thereof, in terms of Rule 4 of the CVR-2007 read with Section 14 of the Cus-

toms Act, 1962.

iii) Goods covered by two bills of entry, having aggregate declared value of Rs.

19,82,42,342/-(CIF) as detailed at Sr.No. 45 & 47 of Annexure A to this no-

tice, imported & cleared in pursuance of Agreement No. 415703 dated 01-

10-2010 by M/s PMC Projects (India) Private Limited for and on behalf of the

owner MEGPTCL, seized under Order dated 14-05-2014 issued under provi-

so to Section 110(1) of the Customs Act, 1962 should not be confiscated un-

der 111(d) and Section 111(m) of Customs Act, 1962.

iv) Penalty under Section 112 (a) &(b) of the Customs Act, 1962 should not be

imposed on each one of them in relation to goods imported under the two

bills of entry.

v) Penalty under Section 114AA of the Customs Act, 1962 should not be im-

posed on them.

II) M/s Electrogen Infra FZE, UAE, Shri Vinod Shantilal Adani @Vinod

Shantilal Shah, Shri Jatin Shah, Shri Mitesh Dani, Shri Mehul Jani, all employees of

M/s Electrogen Infra FZE, UAE are required to show cause to the adjudicating

authority as to why penalty under Section 112 (a) & (b) and Section 114AA of the

Customs Act, 1962 should not be imposed on each one of them in relation to the

goods imported under the two bills of entry.

III) Shri Jaydev Mishra, Associate General Manager, and Shri Dharmesh

Parekh, Senior Manager - both employees of M/s PMC Projects (India) Private Limited,

are required to show cause to the adjudicating authority as to why penalty under

Section 112 (a) & (b) and Section 114AA of the Customs Act, 1962 should not be

imposed on each one of them in relation to above goods imported under the two bills

of entry.

22.0 Each of the above noticee, is required to submit a written reply to the

Adjudicating Authority within 30 days from the date of receipt of this notice. In their

written reply, the noticees may also indicate as to whether they would like to be heard

in person. In case no reply is received within the time limit stipulated above or any

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further time which may be granted and/or if nobody appears for personal hearing,

when the case is posted for the same, the case will be decided ex-parte on the basis of

evidence on record and without any further reference to the noticees.

23.0 The relied upon documents (RUD) are listed in Annexure ‘R’. Softcopies

of which are being supplied alongwith this notice in a CD. If, before filing replies to

this notice, the noticees desire to inspect any documents, which are relied upon, they

may do so with prior permission of the Deputy Director, Commercial Intelligence (C.I.)

Cell, 5th Floor, 13, Sir Vithaldas Thackersey Road, New Marine Lines, Mumbai 400

020 on any working day.

24.0 This show cause notice is being issued under section 124 of the Customs

Act-1962, without prejudice to any other action that may be taken in respect of the

above goods and / or the persons / firms mentioned in the notice under the provisions

of the Customs Act, 1962 and / or any other law for the time being in force in the

Republic of India.

(P.K. DASH)

ADDITIONAL DIRECTOR GENERAL

Encl :Annexure A&Annexure R

1. M/S MAHARASHTRA EASTERN GRID POWER TRANSMISSION COMPANY LIMITED (MEGPTCL), ‘ADANI HOUSE’, MITHAKHALI SIX ROADS, NAVRANGPURA, AHMEDABAD 380 009

2. M/S PMC PROJECTS (INDIA) PRIVATE LIMITED,

REGISTEREDOFFICE : AIIM, AT SHANTIGRAM, NEAR VAISHNODEVI CIRCLE, SG HIGHWAY,

AHMEDABAD-382421

3. M/S ELECTROGEN INFRA FZE, SAIF PLUS, R4, 38/A,SAIF ZONE, P.O.BOX 122528, SHARJAH UNITED ARAB EMIRATES

4. SHRI VINOD SHANTILA SHAH alias VINOD SHANTILAL ADANI, ADANI HOUSE NR MITHAKHALI CIRCLE NAVRANGPURA AHMEDABAD 380 009 GUJARAT

5. SHRI JATIN SHAH

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SAIF PLUS, R4, 38/A,SAIF ZONE, P.O.BOX 122528, SHARJAH UNITED ARAB EMIRATES

6. SHRI MITESH DANI

SAIF PLUS, R4, 38/A,SAIF ZONE, P.O.BOX 122528, SHARJAH UNITED ARAB EMIRATES

7. SHRI MEHUL JANI, SAIF PLUS, R4, 38/A,SAIF ZONE, P.O.BOX 122528, SHARJAH UNITED ARAB EMIRATES

8. SHRI JAYDEV MISHRA, ASSOCIATE GENERAL MANAGER, M/S PMC PROJECTS (INDIA) PRIVATE LIMITED,

REGISTEREDOFFICE : AIIM, AT SHANTIGRAM, NEAR VAISHNODEVI CIRCLE, SG HIGHWAY, AHMEDABAD-382421

9. SHRI DHARMESH PAREKH, SENIOR MANAGER, M/S PMC PROJECTS (INDIA) PRIVATE LIMITED,

REGISTEREDOFFICE : AIIM, AT SHANTIGRAM, NEAR VAISHNODEVI CIRCLE, SG HIGHWAY, AHMEDABAD-382421

Copy to :

i) The Commissioner of Customs, Kandla ii) The Commissioner of Customs, (Import), Nhava Sheva iii) The Deputy Director, B Cell, DRI, MZU, Mumbai

D I R E C T O R A T E O F R E V E N U E I N T E L … 3 of 97 2003 and the Maharashtra Electricity...

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