Tax sleuths detect over Rs 100 cr evasion by cigarette makers

Excise duty evasion of over Rs 100 crore has been detected by central revenue department during searches carried out at the premises of cigarette manufacturers in various states of the country.
Acting on intelligence that certain cigarette manufacturing units in Nakodar (Punjab), Nagour (Rajasthan), Bhopal and Indore in Madhya Pradesh, have been indulging in a major racket of central excise duty evasion, the department's officials carried out searches at the premises of the product's manufacturers, dealers and agents, sources said.
These were also undertaken in Koshikalan, Mirzapur, Ghaziabad, Kasganj, Meerut, Greater Noida and Ghaziabad (all in Uttar Pradesh), Rajnandgaon (Chhattisgarh) and in Mumbai (Maharashtra), they said.

The searches resulted in huge recovery of cigarettes, which were being sold across the country by evading excise duty payable on them, they said.
The officials of Directorate General of Central Excise Intelligence (DGCEI), who carried out the searches, have also seized account books of these manufacturers, the sources claimed.
Prima facie the manufacturers seem to have evaded excise duty of over Rs 100 crore, they said, adding that further investigation in the case was on.

Excise duty of about 85 paise is levied on a cigarette stick of 70 mm. The accused were selling a pack of 10 cigarettes at a cost of Rs 3-5, which is impossible considering the amount of duty imposed on them, they said.

DGCEI officials have been carrying out searches for the past six months. They had last month searched the premises of a cigarette manufacturer in Punjab and found alleged excise duty evasion of Rs 10 crore.
Further probe by the DGCEI has also uncovered that these manufacturers were allegedly misusing rakes provided by Railways for movement of goods.
"The DGCEI will also take up the matter with Railways to investigate the matter as these manufacturers were parceling cigarettes by wrongly declaring them as other commodity," a source said.
Officials have also recovered cash and other valuables worth about Rs 50 lakh and cigarette stocks worth several crores during the operations, the sources added.