4 Customs men suspended in 100cr duty con

Mumbai: Directorate of Revenue Intelligence has unearthed a Rs 100-crore scam where imports were undervalued for duty evasion and also, prohibited goods were cleared with the connivance of Customs officials. Four Customs officials posted at Indore—assistant commissioner S Chattaraj, superintendents Vinayak Joshi and Mangilal Chouhan, and inspector Rajesh Purania—have been suspended.

Kingpin Kirit Shrimankar effected imports through 18 fictitious companies and indulged in proxy imports through four others who denied importing anything. The goods, including ladies innerwear, chatons and garment accessories, were misdeclared as fabric and gift sets to evade duty. Similarly, prohibited goods like sex toys and Chlorodifluoromethane, a restricted item because of its ozone depletion potential, was imported and cleared. In some cases, only 4% of the actual value was declared.

The goods were imported from China through Nhava Sheva port and transported to Inland Container Depot, Dhannad at Indore, for clearance. “The goods were then transported back to Mumbai for sale, which defies commercial logic,” said an official. “Such imports by proxy or benami importers provide smuggling syndicate a cover to evade taxes and duties as the goods are sold entirely in cash,” said an official.

Shrimankar and his associate Manjit Singh had moved the SC in June saying their fundamental rights have been threatened. The SC has granted interim protection. The matter will be heard on September 24.
Courtesy:
C Unnikrishnan TNN
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The beedi businessman, his foreign cars and associated troubles

Beedi businessman Muhammed Nisham has at least six imported cars. And one or the other of them has been at the centre of every controversy that he has been involved in over the past few months.

The latest is a summons sent to him from customs in Thrissur, asking him to produce relevant documents next week about his Bentley, Rolls-Royce, Aston Martin, Road Ranger, Ferrari and Jaguar. The Customs Department wants to verify whether the imports are in order, or if the cars were undervalued.

Nisham is managing director of Tirunelveli-based King Beedi Co. Apart from being a prominent tobacco supplier, he has hotel and jewellery businesses in the Middle East.

His vehicles, which include a Skoda and an Audi, have been at the centre of public attention since April after he allowed his nine-year-old son to drive one of them in a residential complex of Thrissur, leading to a police case. And last week, during a police check, he allegedly locked a woman sub-inspector inside another of his vehicles.

In April, Nisham's wife, Amal Nisha, lovingly shot a video of their son Ishan, 9, at the wheel of their Ferrari, his four-year-old brother by his side. These visuals of the elder boy driving through the residential area went up on YouTube, sparking outrage among viewers. The police were initially hesitant to act but eventually booked Nisham on two charges — under the Juvenile Justice Act for cruelty to a child, and under the Motor Vehicle Act for allowing a person without a licence to drive. Arrested under the latter charge, Nisham was later released on bail.

His next run-in with the police came in Thrissur on Thursday last week, followed by the customs notice from there. He was driving his brand-new Rolls Royce when police stopped him for a routine check. Police say Nisham was under the influence of alcohol, which he admits.

Police allege Nisham tried to manhandle a woman sub-inspector in their team. He allegedly told them that no police station in Kerala is fit for his Rolls-Royce to park at. To prevent him from driving away, the woman sub-inspector got into the car for the keys. Police say Nisham, who was outside, locked the doors with remote control, trapping the sub-inspector inside. More policemen arrived and had a heated argument with Nisham who, they say, "released" the sub-inspector only after that.

He was arrested and produced before a local court, which first remanded him in judicial custody and then granted him bail the following day.

Nisham denies having locked the woman in. "The woman SI told her colleagues to take me into custody, saying that here is the person who allowed his minor son to drive a Ferrari," he says. "I did not lock her inside; she could have come out if she wished. Everything has been recorded on camera. And what I told the police was that the Rolls-Royce was new, and it was not proper to take it to the police station the first day."
Courtesy:
Shaju Philip : Thiruvananthapuram, Fri Jun 21 2013, 08:21 hrs
http://www.indianexpress.com/news/the-beedi-businessman-his-foreign-cars-and-associated-troubles/1131721/0

Ranbir Kapoor detained at airport, fined Rs 60,000

Actor Ranbir Kapoor was detained at the Mumbai International Airport around 1 am Saturday, and fined Rs 60,000 on undeclared branded goods after nearly 40 minutes of detention. Ranbir, who landed in the city from London, was carrying perfumes, clothes and footwear worth around Rs 1 lakh, when his passport endorsement said he was allowed to bring in goods worth Rs 15,000, an airport customs officer said.

The30-year-old, who arrived on a British Airways flight, was intercepted by the customs officers when he was walking towards the exit through the red channel, which is used by the passengers to declare imported goods. Ranbir, however, was received by a member of his staff near the red channel, and the two were on their way out when they were asked to step aside for luggage inspection.

The customs sources said Ranbir had a minor argument with their staff, and told them he wasn’t aware of the rules. “He was detained for nearly 40 minutes, and fined Rs 60,000 after the valuation of goods,” an officer said. The customs officials are also investigating how the actor’s assistant was allowed to enter the area near the baggage conveyor belts.

Said Sameer Wankhede, deputy commissioner, Mumbai Customs’ air intelligence unit, “Ranbir’s luggage was checked and he was found with branded goods such as perfumes, clothes and footwear worth Rs 1 lakh which he should have declared at the red channel. Common man or celebrities, rules are same for everyone, and they should be aware of those.”

Bipasha Basu, Ameesha Patel and Minissha Lamba, and singer Mika Singh are among the celebrities fined earlier for customs violations.
Courtesy:
Nazia.Sayed @timesgroup.com TWEET @_mumbaimirror
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Iron Ore Scam: Iron ore exporters cheat Railways of 50,000 crore

The Railways may have been defrauded of as much as Rs 50,000 crore by iron ore exporters claiming domestic tariff on consignments meant for export.

NEW DELHI: Total recoveries for the railways from the organized fraud perpetuated by numerous iron ore exporters by showing exports as domestic consumption could be as high as Rs 50,000 crore, according to documents, sources and an ongoing multi-agency investigation. In 2012-13, estimated losses for the railways are pegged Rs 24,600 crore.

On the orders of the Central Vigilance Commission (CVC), a multi-disciplinary agency comprising CBI, Customs and other investigative wings, are investigating in eastern India, and have unearthed fraud perpetuated by over a dozen iron ore exporters that has resulted in a loss of over a thousand crore to railways.

An interim report a few months ago had said that of the 10 companies examined nine had indulged in claiming the subsidized railway freight rates by misrepresenting exports as movement for domestic consumption. The investigation began initially against Kolkata-based Rashmi group, which was accused of duping railways of almost Rs 700 crore by transporting iron ore meant for export at domestic freight rates. Noticeably, even after it was served notices, the group is alleged to have continued with its `illegal activities' in 2011-12, resulting in a loss of another Rs 202 crore to the railways, official documents show.

Exporters like Rashmi group have claimed that they were transporting iron ore for domestic consumption, and thus claimed massive concession in railway freight charges. If iron ore is being moved for domestic use freight charge per tonne is around Rs 300-Rs 400, where as it is over Rs 2,000 per tonne for exports.

According to ongoing investigations by the multi-agency probe and vigilance officials in various divisions of the railways, ever since it introduced the dynamic pricing in 2008 the losses suffered by railways runs into thousands of crores.

An ongoing audit by the CAG only in South Eastern Railway has detected Rs 4193.52 crore of revenue leakage. This audit was limited to five select loading points of the Chakradharpur Division. South East Railway alone has around 50 loading points. Another CAG audit report tabled in Parliament in 2011-12 on the East Coast Railway had disclosed that undue benefit of Rs 1795.5 1core to the iron ore exporters.

The chief vigilance officer of Southeast Railways has so far sent notices to several other companies for evasion running into over Rs 1,000 crore, sources said.

A special court officer appointed in 2011 to supervise the movement of iron ore by Rashmi group after the evasion came to light, has complained in a report to the court that he was shown not records by the company, nor did the group respond to his letters.

In 2010-11, railways earned Rs 9,011 crore by transporting 118.4 million tonnes of iron ore. Of this, iron ore for integrated steel plants within India was 44.67 million tonnes, and it earned railways Rs 1,359 crore. Strangely, iron ore for other domestic users was 48 million tonnes, earning railways Rs 2,668 crore. Hence, smaller domestic users, mostly sponge iron plants, have ended up using more than integrated steel plants such as that of SAIL, Tatas and Jindal.

In contrast, the total iron ore export during 2010-11 was 25 million tonnes. But because the freight charge for exports is several times more, railways got Rs 4,983 crore revenue.

According to sources involved in the investigations, against a domestic requirement of 30 million tonnes for smaller users railways records show that there was transportation of 48 million tonnes in 2010-11. This calculation is based on the presumption that entire iron ore is being transported by train, whereas there is a segment moving by road.

So at least 18-million-tonne iron ore was transported in the name of domestic consumption, but found its way into foreign countries, mostly China. At an average of Rs 200 crore revenue for every million tonne of export, the total loss is Rs 3,600 crore in 2010-11. This trend has been on since 2008, when the dynamic pricing was introduced.

Besides the losses, a penalty is recoverable at four times the loss, according to the dynamic pricing mechanism. So the annual revenue gain for railways works out to around Rs 18,000 crore. Calculating the revenue gain from May 22, 2008, sources are arguing that till 2012 the total revenue gain for the railways could be over Rs 50,000 crore. That is, if the law is implemented in letter and spirit.
Courtesy:
Josy Joseph, TNN | Apr 25, 2013, 05.11 AM IST
http://timesofindia.indiatimes.com/india/Iron-ore-exporters-cheat-Railways-of-50000-crore/articleshow/19718806.cms

Customs slaps 38.5cr duty evasion fine on Adani firms

Mumbai:The Customs department has imposed a collective penalty of Rs 38.5 crore on Ahmedabad-based Adani Exports Limited (AEL) and its related entities in a case of Rs 679.62 crore duty evasion involving import and export of diamonds. Of the penalty, Rs 1 crore has been imposed on AEL’s managing director Rajesh Adani.

The Customs’ decision has come six years after the Directorate of Revenue Intelligence (DRI) issued a show-cause, accusing the company of importing diamonds and exporting the same, falsely claiming value addition. AEL thus inflated the export turnover to claim government incentives in the form of duty-free imports, DRI had alleged. Customs commissioner P M Saleem, in the January 14 order, endorsed the findings and said, “The value addition claimed is bogus.”

Vikram Nankani of Economic Laws Practice, who represented the company, said they have gone in appeal in the Customs, Central Excise and Service Tax Appellate Tribunal. “The matter is sub judice and I would not like to comment,” he told TOI over the phone on Friday. AEL had denied the allegations during the hearing of the show-cause notice and said the value addition was genuine.

In 2004, the government launched a scheme, Target Plus, that permitted duty-free imports for companies which fulfilled certain export performance conditions. The scheme was for five years, but diamonds were removed from the list of items in 2006, following misuse complaints. While the scheme was in force, AEL acquired interest in two companies and accordingly, the export figures rose. When the policy changed, enhancing the value addition from 5% to 10%, AEL’s corresponding figures also rose, thus inflating exports, the order said. The exports dropped to one-third in January 2006 because the companies had achieved the targets for the same by then.

The order said the companies in Hong Kong and Singapore that either supplied the diamonds or bought the value--added diamonds were controlled by AEL. These firms were shut the moment the incentive scheme was discontinued. AEL also paid illegal commission to overseas entities for exports, which if taken into account reduces the value addition claimed by the company. AEL is the main culprit, the order said.

The order said that AEL entered into MoUs with group companies, who passed on incentives claimed for exports to AEL for a commission.
Courtsy:
C Unnikrishnan TNN
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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
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