DRI Launches Probe Into Adani Defence For Alleged Rs. 77 Crore Import Duty Evasion On Missile Components

The Directorate of Revenue Intelligence (DRI) has initiated a detailed probe into Adani Defence Systems and Technologies Ltd., a subsidiary of Adani Enterprises, over allegations of customs duty evasion on imported missile components.

According to preliminary findings, the investigation focuses on whether parts imported for short-range surface-to-air missile systems were declared as components of long-range missiles to avail duty exemptions that were not applicable.

Under prevailing rules during the relevant period, short-range missile components were subject to a 10% basic customs duty along with 18% local tax, while parts used for long-range systems enjoyed exemption.

Officials have estimated that the alleged mis-classification led to a revenue loss of about Rs. 77 crore.

Documents reviewed by the agency indicate that Adani Defence imported non-explosive parts and accessories used in the manufacture and launch mechanisms of missile systems.

These items are said to include structural fittings, mounting assemblies and control interfaces that fall within the tariff lines attracting the standard customs rate. The DRI's assessment suggests that the company may have claimed exemption on consignments that should have been taxed, prompting issuance of summons and requests for supporting documents.

During the course of the inquiry, company representatives acknowledged differences in classification but maintained that the imports were made in accordance with applicable notifications and technical documentation from suppliers.

Adani Defence is stated to have provided customs entries, end-use certificates, and correspondence with foreign vendors in response to the DRI’s queries.

Trade data cited in the investigation show that the company imported about USD 32 million worth of such components from Russia since 2024. Total imports by Adani’s defence arm from Russia, Israel, and Canada together are valued at around USD 70 million in the same period.

Officials note that the disputed duty amount represents a significant portion of Adani Defence’s financials for FY 2024–25; over 10% of its reported revenue and more than half of its profit for that year.

Under Section 28 of the Customs Act, 1962, where duty has been short levied or not levied due to suppression or mis-statement, authorities are empowered to recover the amount along with interest and impose a penalty up to the sum of the evaded duty.

If such provisions are applied, the potential liability could rise to approximately Rs. 154 crore. The DRI has pursued several similar cases in recent months involving alleged mis-classification by large importers across sectors, signalling a tightened approach toward revenue enforcement.

An Adani Group spokesperson said the company has cooperated fully with the authorities and furnished all necessary documentation. “The DRI had sought clarifications based on its interpretation of the applicable customs provisions. We have provided the required details and, from our end, the matter stands concluded,” the spokesperson said. The DRI, however, continues to examine records and has not issued any final order.

The timing of the probe coincides with the government’s September, 2025 amendment to customs rules, which exempted all missile parts from import duty.

Adani Defence has referred to this policy change in its communications, indicating that the exemption underscores the strategic nature of such imports.

Officials involved in the investigation have clarified that the notification is prospective and does not automatically apply to transactions made before its issuance. Therefore, the agency’s review remains focused on earlier consignments imported under the previous duty regime.

The Directorate of Revenue Intelligence, which functions under the Central Board of Indirect Taxes and Customs, is the apex body for investigating complex cases of duty evasion, smuggling, and trade-related financial fraud. Its officers are empowered to summon documents, record statements, and recommend recovery proceedings under the Customs Act. Once its findings are finalized, the DRI typically forwards its report to jurisdictional customs authorities for adjudication.

The Adani Group has in recent years expanded its defence business, supplying drones, electronics, and weapon systems to Indian armed forces and participating in multiple government tenders.

The DRI’s scrutiny, officials said, is limited to the customs compliance aspect of imports and does not affect operational contracts. No formal notice of demand has yet been issued, and the inquiry remains at a fact finding stage.