New Delhi, July 4: The Mumbai Customs Department has seized two aircraft of Reliance Industries Limited (RIL) saying the company had evaded duty amounting to Rs 58 crore while importing them. The action against RIL is the first of a series of seizures for duty evasion by various industrial houses that runs into “several hundred crores.”

Officials in the Customs (Preventive) Department told The Indian Express that 50 show-cause notices are in the process of being issued to various industrial houses who own aircraft and that investigations are in full swing.

On Thursday, senior officials of the department briefed top officials of the Ministry of Finance and the Intelligence Bureau about the large-scale evasion.

The confidential note prepared by the Department, available with The Indian Express, says: “There are several such cases of import of private aircraft ostensibly under non-schedule operator permit by hoodwinking Customs to deliberately evade duties by top corporate honchos. It is estimated that the total duty evasion by many such bigwigs of Indian industry may be to the tune of several hundred crores.”

The Customs intelligence has reported that it was on June 26 that Reliance Commercial Dealers Pvt Ltd was served a show-cause notice for evasion of customs duty amounting to Rs 58 crore for “willful misrepresentation and suppression of facts for private use of the imported aircraft in the guise of non-scheduled operators (passenger) permit.”

This, the Department has noted, is a violation of the April 7 notification of the Directorate General of Foreign Trade as well as of the Customs notification no 61/2007 of May 2007.

The Customs Department has informed the Government that another show-cause notice for evasion of duty amounting to Rs 42 crore is “in the process” of being issued for the import of a Falcon aircraft imported by the Reliance group.

The note also gives a list of other corporates who have allegedly evaded customs duty in the purchase of aircraft.

It states: “Similarly, another show-cause notice demanding customs duty amounting to Rs 13.92 crore has been issued to M/s East India Hotels ltd on June 26. Other show-cause notices in the process of being issued include M/s Bharat Hotels, Global Vectra ltd, Ranbaxy Ltd, GMR Ltd, India Bulls Ltd, Indo-pacific Aviation (Punj Lloyd), Internaitonal Air Charter Operations Ltd, Videocon, Taneja Aerospace & Aviation Ltd, Jagsons Ltd, Raymonds Ltd, Taj Air Ltd and others. Necessary seizures are also being effected.”

The Customs Department has revealed that the massive duty evasion case against business houses was built following specific intelligence and the scrutiny of bills of entry filed during the year 2007-08 for the import of aircraft and other documents related to the actual use of the aircraft.

Following scrutiny, the Department found a violation of Condition 104 of the Customs notification dated March 1, 2002 which was amended by notification no 61/2007 of May 3, 2007.

“The condition provides that if the aircraft are imported by an operator who has been granted approval by the competent authority in the Ministry of Civil Aviation to import the aircraft for providing non-scheduled (passenger) services or non-scheduled (charter) services, the said aircraft shall be used only for providing non-scheduled (passenger) services or non-scheduled (charter) services as the case may be,” it said.

It is understood that the Customs Department will also be inquiring from the Director General of Civil Aviation (DGCA) about why no records were maintained about the nature of use of aircraft after issue of licences. DGCA officials, however, told The Indian Express that they are yet to be informed about the Customs action.

Top officials in the Finance Ministry and the Central Board of Excise and Customs only said that a probe and investigations are on in the case.

The RIL’s Airbus and a Falcon 900 EX, together valued at about Rs 400 crore, were seized on Thursday night and a showcause notice was issued to Reliance by an additional commissioner.

The planes have been returned to Reliance for regular maintenance as the Customs Department does not have the facilities to keep them but they cannot be used without the department’s permission, said the official who did not want to be named.

A Reliance entity called Reliance Commercial Developers imported the aircraft last year, he said, and added that the total duty on the two planes came to about Rs 90 crore while Reliance had paid Rs 30 crore.

Reliance, on its part, said that the “concerned department” had sent out notices to several other non-scheduled operators on the same issue as a matter of “routine procedure”.

“As a part of this routine procedure, two of Reliance Commercial Developers’ aircraft were detained and handed back to the company thereafter,” RIL said in a statement. “Reliance is fully complying with all procedures as notified by concerned authorities.”

(with ENS, Mumbai)