CHENNAI: Investigating a case of mis-declared textile imports at the special economic zones (SEZ), the Directorate of Revenue Intelligence (DRI) has busted a new modus operandi where goods worth at least Rs 50 crore were moved out of a Chennai warehouse using documents of earlier consignments to avoid official scrutiny and payment of customs duty.
The scam was detected by DRI’s New Delhi unit at a Free Trade Warehouse Zone (FTWZ) in Nandiambakkam in north Chennai in January, where two directors of the warehousing firm were arrested. Similar probes were conducted in Mumbai and Gujarat ports as well.
The agency found that specific types of knitted and crocheted fabrics, which are restricted for import below a minimum import price (MIP) of USD 3.5/kg, were misdeclared as Viscose knitted fabric and cotton knitted fabric to avoid paying customs duty.
DRI found that goods from the misdeclared and misclassified consignment, which had a bill of entry (BoE) of January 10, were clandestinely removed and sent out of the warehouse on January 4 to Panipat, Haryana, to hoodwink customs.
Customs rules mandate that importers must file two BoEs to take out goods imported at an SEZ. The first, a Z-type BoE, is for movement from the port to the FTWZ. The second is a T-type BoE, which is for movement outside the FTWZ.
Once a BoE is filed, the goods can be moved out only after payment of duty and obtaining an out of charge (OOC) document from customs, which certifies goods have met regulatory standards and duty has been paid.
In this case, the goods were moved out before filing of T-type BoE and obtaining the OOC, sources said. This was done by using the T-type BoE of an earlier cleared consignment issued to a different importer, sources added.
The modus operandi had been used to clear misdeclared goods for at least 180 consignments worth Rs 40-50 crore over a period, leading to evasion of at least around Rs 5 crore in duty, sources said, adding that this was admitted by the accused to DRI during interrogation.
After DRI began the investigation, the firm paid a part of the customs duty, sources said.
The investigation into the scam began following complaints by Indian textile associations regarding the dumping of Chinese fabrics at Indian ports.