New Tariffs Hit Bearings Sector
Market sources said the central excise department has discovered that a large number of small-scale bearing units are not registered with it, although they have crossed the exemption limit for small-scale industries .
This came to light when the representatives of the SSIs met senior revenue officials seeking levy of heavy import duty on several sizes not incorporated in the new tariff code.
Sources said the small-scale industries inadvertently gave away their actual turnovers while seeking more protection.
The representatives of the small-scale industries were manipulated by the local manufacturers of expensive western brand names, market sources said.
The western brand name manufacturers had been insisting that the import duty on bearings should cover more varieties.
The revenue department had preferred to accept these demands while introducing the new tariff which, according to market sources, will increase smuggling of bearings from Nepal.
They claimed that some revenue officials had preferred to ignore the suggestions of the Mumbai customs which would have rationalised the import duty structure.
The measures suggested by the Mumbai customs to the Central Board of Excise & Customs envisaged rationalisation which could have curbed smuggling of bearings and under-invoicing of imports and hawala transactions.
Mumbai customs sources said these suggestions also envisaged generation of revenue on imports of bearings at a rationalised duty.
However, since these suggestions were ignored by a senior revenue official, who had prevailed upon the ministry to introduce the new tariff code, a cartel of Delhi-based smugglers had become operative.
Just before the new structure was introduced, stocks worth over Rs 250 crore were brought into Nepal, market sources said. Smugglers operating from Nepal indulge in large-scale under-invoicing as they are required to pay duty at the rate of 60 per cent.
However, Nepal authorities prefer to ignore the under-invoicing of these consignments as they are aware that Nepal is only being used as a conduit for which the smugglers are officially paying 60 per cent import duty.
Market sources in Mumbai and Calcutta said the smugglers' cartel had already become operative and the consignments had started pouring in. Unconfirmed reports indicate that revenue officials have already intercepted some of these consignments.
Details of these interception are not being disclosed as Delhi-based parties, considered the main recipients of such consignments, have sought intervention of political leaders, sources said.
Some consignments have found their way to the local market and more such stocks are expected soon, sources said.