Over-Invoicing By Padmini Polymers Unearthed

Massive over-invoicing of exports have come to the notice of Enforcement Directorate (ED) sleuths following raids at the office of Padmini Polymers and its promoter Vivek Nagpal.

The ED probe is now directed at establishing a case of hawala since it is believed to have collected damaging evidence regarding the over-invoicing of exports.

Late last month, officials of the Delhi Customs had raided the premises of a NEPZ-based export unit, Music World. Sources in the customs department said that the raids first revealed that CD-Roms being manufactured at Music World were being sold for a "song" to Padmini Polymers.

The latter was, in turn, exporting the CD-Roms at a "substantially higher price". On the basis of these exports, Padmini Polymers was given value based advanced licences (Vabal) by the Directorate General of Foreign Trade.

 

Documents relating to the over-invoicing are believed to have been seized by the ED officials during the raids earlier this week.

Sources said yesterday that it has now come to the notice of ED sleuths that after Padmini Polymers had obtained the Vabal licences, Gujarat-based Adani Exports was importing plastic and other goods, which attract high customs duty, on behalf of Padmini.

The sources further explained that Adani Exports used to sell to itself the goods that it was importing on behalf of Padmini Polymers.

The goods, on which the customs tariff is very high and which were imported in this manner by Adani Exports, are said to have been sold in the domestic market, earning a huge profit in the bargain.

Adani Exports is a superstar trading house and is among the top seven export houses in the country. The company reported a turnover of over Rs 1,000 crore in 1995-96, while its earning per share in 1995-96 at Rs 73 was among the highest in the country.