Duty Evasion Scam: DRI sends notice to Lalit Modi for 18.5cr duty evasion

Mumbai: The Directorate of Revenue Intelligence (DRI) has issued a show-cause notice to former IPL commissioner Lalit Modi for Rs 18.5 crore duty evasion in the import of an aircraft in 2008.

The aircraft was for Modi’s private use but he created dummy companies to import the aircraft by falsely availing Customs duty exemption, the notice said.

The DRI has relied on the various e-mails between Modi, his former employee and confidante Deepa Palekar and other facilitators to substantiate its claims.

Also, the registration number of the aircraft was VT-RAK, where RAK stood for the first alphabet of his three children, it said.

The Rs 100 crore Bombardier Challenger 300 aircraft was imported by Vile Parlebased Golden Wings Pvt Ltd (GWPL) from Peel Aviation, Ireland, for a lease amount of Rs 10.85 crore for a period of 7 years beginning May 2008.

“Investigations reveal that Mr Lalit K Modi orchestrated a series of events to acquire an aircraft for his personal use,” the notice said. “Peel Aviation is a corporate veil to mask the actual owner of the aircraft, Modi.”

Customs duty exemptions are granted if aircraft is imported for non-scheduled passenger services or non-scheduled (charter) services. Modi’s aircraft was not used for public transport of passengers considering that Golden Wings does not have a published tariff and was not its authorized business activity. It also did not undertake any charter services, the notice said.

Modi had used the aircraft for his trips related to IPL in the country and also abroad. Eighty six per cent of flying hours were used to transport Modi, it said.

The import of spare parts for the aircraft also amounts to duty violation of Rs 45 lakh, it said. The aircraft’s last trip was to United Kingdom on July 20, 2010 and since then it is parked at Beggin Hills airport. The show-cause notice has also been issued to Palekar as well as GWPL directors Pradeep Thampi, and Tanveer Romani.
Courtesy:
C Unnikrishnan TNN
http://epaper.timesofindia.com/Default/Client.asp?Daily=TOIM&showST=true&login=default&pub=TOI&Enter=true&Skin=TOINEW

Duty Evasion Scam: Six firms guilty of export fraud fined 148 crore

Mumbai: The Customs department recently imposed a collective fine of Rs 148 crore on six companies, four central excise employees and a chartered accountant in a case involving fraudulent claim of export incentives. The department has also sought Rs 44 crore for evasion of duty.

A government scheme allowed companies to import raw materials duty-free, provided they export the finished goods. In this case, Shalimar Rexine imported raw material without paying any duty for manufacturing PVC leather, but sold it in the market here.

Additional commissioner of customs Nasim Arshi, in his adjudication order, said, “Supreme Rexine Industries Ltd, Sunrise Exim and Supreme Import and Export were inter-related firms formed with the aim to import raw material by availing exemption from duty and then exporting cheaper quality of PVC leather cloth. This was re-imported and again exported to show artificial discharge of export obligation.’’

Afzal Khan, Yunus Khan, Firoz Khan, directors or owners of Supreme Rexine, Sunrise Exim and Crescent Overseas, plotted the entire fraudulent operation to hoodwink the department of Rs 220 crore.

The case dates back to September 2005, when Customs officials at Nhava Sheva examined Shalimar Rexine’s export consignment and found difference in the weight of the PVC leather cloth. Customs investigations found that Supreme re-imported some of the consignments sent to Dubai and abandoned them after the investigations started. It was also found that Dubai port authorities had blacklisted Shalimar Rexine and auctioned some of the consignments.

Firoz Khan created Crescent to facilitate some of the re-imports which were exported, the adjudication order said. Sunrise was also created as part of the modus operandi. Customs also imposed a fine on three other companies who participated in the fraud.

All those who were found guilty denied the charges before Nasim Arshi. The officials were fined Rs 50,000 each for not following due diligence in the clearance of goods. The Khans and the three companies where they had interests were collectively fined Rs 147 crore. Chartered Accountant Lalit Thakkar was fined Rs 10 lakh. He was fined for issuing certificates confirming export figures which were not genuine. Shalimar Rexine had admitted to Rs 30 crore liability before the settlement commission but did not pay up, officials said.

Courtesy:
C Unnikrishnan TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2012/10/01&PageLabel=4&EntityId=Ar00402&ViewMode=HTML