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Polyester yarn diverted to domestic market: 30 EOUs in Rs 1.5b duty evasion scam

A major scam of evasion of customs and excise duties to the tune of over Rs 1.5 billion by export oriented units in Gujarat and Maharashtra has been unearthed, the Directorate General of Anti-Evasion (central excise) said in New Delhi.

Three people, two of them in Delhi, have been arrested in the case which has very wide ramifications, according to the directorate.

Deputy Director (intelligence) K R Bhargava said the fraud was detected after searches were conducted during the last two months at the establishments of 30 EOUs manufacturing polyester yarn.

These 100 per cent EOUs had supplied yarn to Gupta Carpet Udyog Limited in Gurgaon, Haryana, as 'deemed export' without payment of duty as per facility granted under the exim policy and under central excise and customs law.

The goods meant for Gurgaon under the prescribed documents for manufacture of export products, were diverted to Bhiwandi in Maharashtra to be used in the domestic market in violation of the laid down procedures. No customs and central excise duties were paid, Bhargava said.

An executive of the Gurgaon company forged the signatures of central excise officers to establish legal re-warehousing of the goods under the instructions of the management of the company.

The deputy director said GCUL opened unofficial bank accounts in the name of the company in Gurgaon, Bombay, Surat and other places to enable laundering of sale proceeds of polyester yarn sold in the domestic market without invoices.

For channelising the black money, services of some finance companies of Gujarat and Maharashtra were undertaken with the help of some brokers and intermediaries and these finance companies issued cheques in favour of the Gurgaon firm.

The cheques were deposited by them in their unofficial bank accounts for making payments to the consignor EOUs.

The EOUs, the directorate said, included Baroda Textiles and Dyeing, Poddar Texturisers, Shree Sanad Textiles, Karan Fibres and Textiles, Aryama Textiles Private Limited, Sarla Textiles and Akai Impex, located in Gujarat and Maharashtra.

The investigations indicated that fake transport documents were prepared by the consignor EOUs for facilitating the scam. In certain cases, the consignor EOUs prepared only papers for despatch of the goods to GCUL, when in fact the goods were taken to Bhiwandi or Thane by the sister firm of the EOU.

Bhargava said the people arrested included Sandeep Aggarwal, director of GCUL and Anil Rajaguru, general manager of Baroda Textiles.

He said detailed investigations were in progress in Delhi, Haryana, Punjab, Maharashtra and Gujarat to unearth the scam. Investigations are still underway at more than 40 EOUs.

UNI