Excise busts Rs 100 cr duty evasion racket

The suspected duty evasion, however, is close to Rs 100 crore. The manufacturers covered in the raids include JBF Ind Ltd two units, Raj Rayon Ltd, Silvassa, Filatex Ind, Silvassa, Parsuram Puria Ind Ltd, Piparia and Silvassa, Sunita Crimpers, Sunita Synthetics, Blue Blends I Ltd, Piparia, Blue Blends I Ltd, Rakholi, Bhilosla Synthetics P Ltd, two units, Bhilosla Tex and Twists, Bhilosla Tex, Welspun Syntex Ltd,Beekaylon Syn Ltd, Beekaylon Inds Ltd, Mehra Tex, Mehra Tex Ltd, Unipon I Ltd, Siyaram Silk Mills, Tulsiani Builders and Textile Ltd, S R V Polytex, Super Tex Industries two units, Viptex, Micro Synth Fab Ltd, and Alok Textile.

Goods worth Rs 18 lakh were seized from one Bhagyashali Textiles Pvt Ltd, in Murbad alone. Highly incriminating documents were found from the premises, department sources said.

PTY is used in making polyester fabric. The modus was that PTY manufacturers would clear the goods, highly undervalued, under invoices of fake companies. The manufacturers used transporters who also doubled as godown keepers to store the goods on behalf of the manufacturers.

While these manufacturers are located in Silvassa, the godown-owners/transporters are based in Mumbai/Bhiwandi. The manufacturers would clear goods under invoices of fake consignees. The godown-keepers, in turn would issue the goods to the actual customers on receiveing delivery orders submitted by other local transporters. Thesedelivery orders carried stamps of the fake consignees, the stamps also provided by the manufacturers themselves!

The godown-keepers would charge Rs 40-60 per carton of Rs 50 Kg as rent and other charges and report back the transaction to the manufacturer. These persons have admitted that they were storing goods on behalf of the manufacturers.

The local transporters, from whom rubber stamps were recovered 800 in all, are the third link in the racket. The stamps of the fake companies/consignees, were used to match the names of the fake companies mentioned in the original invoice.

The whole racket reveals total collusion between the PTY manufacturer, the godown-keeper/transporter and the local transporter in clandestinely clearing goods to users who are not those named on the papers.

The statutory Central Excise records with the manufacturers were also found to be incomplete, with either details of quality missing or specification missing, making it virtually impossible to ascertain the value of goodssold.

While the goods sold to the users were highly undervalued, the department found that the differential was in fact recovered by the manufacturer in cash. Thus, the manufacturer paid lower excise duty, while the customer, who is not the fake company mentioned in the invoice and delivery order, gets the PTY without there being a record of the same.

His further production can thus be kept clandestine, giving him a source of cash generation. And though the sale actually took place outside Silvassa, no sales tax is paid. Sales tax is exempt in Silvassa, but not in Mumbai.

Since these customers cannot be traced, the department cannot verify the actual quality, values and quantity of goods cleared by the manufacturer. But for specific intelligence, the department would not have even known of the undervaluation.

Investigations are in progress and more units are likely to come under the Anti-Evasion dragnet soon.