Adani Power, Essar Power over-invoiced cap goods imports?
Adani Power and Essar Power have been slapped with notices by the DRI for allegedly over- invoicing of capital goods imports in a bid to charge higher power tariffs or siphon off money abroad. The fresh notices are in addition to a Rs 5,500 crore May 2014 notice on Adani and Rs 2,600 crore notice on Esar in March 2015. The new notice slapped on Adani is said to be for Rs 3,000 crore and that on Essar for Rs 1,100 crore, sources said.
While Adani did not respond to emails seeking comments, an Essar spokesperson said: "We have received a show-cause notice by DRI, where the agency has sought our 'clarification' in context of invoicing issues. We are responding to the concerns raised in the notice."
"We strongly refute and deny the allegation. All our procurements stand the strictest scrutiny of law. Our project cost compare favourably with similar projects built in India," he said. Besides capital goods, the Directorate of Revenue Intelligence (DRI) is also investigating about 40 energy companies and traders, including some in the state sector, for alleged over-invoicing of imported coal including through a tax haven to siphon off money abroad and charge higher power tariffs.
Sources said notices on the issue of over invoicing of coal are also being issued to firms ranging from GMR to Reliance Power.
The agency is said to have found that certain importers of Indonesian coal were artificially inflating its import value against the original price, the sources said.
The objective of over-valuation appears to be to siphon off money abroad and to avail higher power tariff compensation based on artificially inflated cost of the imported coal, they said.
The Essar spokesperson said: "This is only a Show Cause Notice and we are confident that during the proceedings, the explanations provided will be considered satisfactory by the adjudicating authorities."
Essar group, he said, is strongly committed in adherence to law of the land.