Pune firm involved in ‘Rs 200-cr financial fraud’https://indianexpress.com/article/cities/mumbai/pune-firm-involved-in-rs-200-cr-financial-fraud-4443822/

Pune firm involved in ‘Rs 200-cr financial fraud’

DGCEI seizes cash in new notes from the firm’s premises

A bank official counting notes seized by the DGCEI after raids on a prominent Pune firm. Express
A bank official counting notes seized by the DGCEI after raids on a prominent Pune firm. Express

The Directorate General of Central Excise Intelligence (DGCEI) in Pune has unearthed an alleged Rs 200 crore ‘financial fraud’ by a prominent manufacturer who supplies goods to automobile firms, said official sources familiar with the development. The DGCEI on December 23 raided six premises of the firm in Pune and seized records, documents, laptops and Rs 13 lakh. Interestingly, over 75 per cent of the unaccounted money is in new currency notes of Rs 2,000.

According to sources, the firm has evaded central excise duty of over Rs 20 crore. “The company was found to be evading tax by procuring fake bills worth Rs 200 crore to book fictitious expenses,” said Vaishali Patange, Deputy Director, DGCEI Pune. Patange said the company would avail Central Value Added Tax (CENVAT) credit on fake invoices obtained from suppliers and utilise it for the payment of excise duty.

CENVAT credit is a scheme where manufacturers are allowed a set off on the taxes paid on the inputs or the input services used while manufacturing the final products or providing the output service. “Presence of such huge amount of unaccounted cash after demonetisation has raised suspicion of illegal conversion of old currency into new notes,” said a senior official who did not want to be named.

“We will interrogate the promoter of the firm. If he is unable to explain the source of the money seized by the department, we will refer the case to the Income Tax authority,” the official added. Patange declined to divulge the name of the firm as investigation is still underway.