The Directorate of Revenue Intelligence (DRI) has asked the Central Bureau of Investigation (CBI) to investigate two Reliance ADAG firms, namely Reliance Infrastructure Ltd and Rosa Power Supply Co Ltd, in connection with alleged overvaluation of imported Indonesian coal between 2010 and 2015.
In a letter dated December 21, 2018, the DRI has urged the CBI to act under the law against Reliance Infrastructure and Rosa Power for allegedly siphoning about Rs 386 crore through overvaluation of at least 73 consignments of imported Indonesian coal.
While the CBI is yet to register a preliminary enquiry in the case, there are indications that it could look into violations of the Indian Penal Code (IPC) since the DRI has alleged that artificial inflation of imported coal has led to increase in its landed cost. Since coal is a primary fuel in coal-fired electricity power plants, it has led to an increase in power tariffs for electricity consumers.
According to a show cause notice issued by the DRI to Reliance Infrastructure and Rosa Power in August 2016, the two ADAG firms not only violated Customs norms but also other laws like the Electricity Act, 2003, Income Tax Act, 1961, Foreign Exchange Management Act, 1999, Prevention of Money Laundering Act, 2002, Companies Act, 2013, and Securities and Exchange Board of India Act, 1992.
The DRI has alleged that most of the imported coal was supplied to Reliance Infrastructure’s Dahanu power generation plant in Maharashtra and the Rosa Power plant in Uttar Pradesh.
According to a DRI probe, Indonesian coal was directly imported to India while import invoices were allegedly routed through one or more intermediaries based in Singapore, Hong Kong, Dubai and British Virgin Islands to artificially inflate its value.
The DRI found that inflated invoices received in India were issued by intermediaries, which are allegedly subsidiary companies of Indian importers or their fronts.