DRI unearths evasion, undervalue of goods worth Rs 19 cr

Sources say one Rajeev Agarawal, based in Surat, floated two firms namely Modena Creation Impex and Royal Impex in name of other persons

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Three separate incidents of goods being sold at a value higher than its original market price, being undervalued and import of second-hand goods have been unearthed by the Ahmedabad unit of Directorate of Revenue Intelligence (DRI). The agency has confiscated goods worth approximately Rs 19 crore in total.

In the first incident, sources said that one Rajeev Agarawal, based in Surat, floated two firms namely Modena Creation Impex and Royal Impex in the name of other persons. Acting on specific intelligence input, it came to light that Agarawal used to ship goods of inferior quality at highly overvalued rates to claim excess export incentives in the form of 'Drawback'.

Extensive search operations conducted at his residence and office premises resulted in discovery of several incriminating documents, sources said, adding that searches were also undertaken at the addresses and branch offices of both the firms in New Delhi and Kanpur.

Detailed examination later revealed that Agarawal used to purchase inferior quality of goods from the local markets of Surat and Mumbai. Sources stated that the actual cost of goods used to be much less than the value depicted on the documents at the time of export so as to claim excess export incentives. Probe is underway in the case and the approximate Drawback involved is to the tune of Rs 9 crore.

Meanwhile, in the second incident, Silvassa-based Gem Aromatics Pvt. Ltd. cleared imported goods (duty free and duty paid) as such without being manufactured in the open market after repacking. Searches were conducted at the office, factory premises of the importer and the local buyers of these goods at Silvassa, New Delhi and Mumbai.

Sources said that the importer used to import duty-free raw material under advance Authorization Scheme and sold the same as such without manufacturing in the open market after repacking. Further, in order to fulfill the export obligation, the company used to export other goods but did not export the goods manufactured from the raw material imported duty-free. The company, thus, evaded duty around Rs 5-6 crores using this modus operandi. A detailed investigation is also underway in this case.

In another incident, one Uttar Pradesh-based K K Milk Fresh India Limited imported capital goods from Mundra port in Kutch by wrongly declaring exemption claim benefit under the Export Promotion Capital Goods (EPCG) scheme. Investigations revealed the consignment of the imported goods to be second-hand and the same were not allowed to be imported under EPCG scheme. The consignment has been confiscated and valued at Rs 4 crore.