DRI busts ARECA Nut Import Racket; Detects Rs 2,500-Cr revenue loss
New Delhi, Aug 16 (TNT): The Directorate of Revenue Intelligence (DRI) has busted a major syndicate involved in the illegal import of South-East Asian areca nuts into India by allegedly mis-declaring them as Bangladeshi-origin goods to fraudulently avail duty exemption under the South Asian Free Trade Area (SAFTA).
The month-long intelligence-led operation has so far indicated potential revenue loss of more than Rs 2,500 crore to the exchequer, while nine persons have been arrested in connection with the case, the Agency said in a release on Sunday.
Areca nut imports normally attract Basic Customs Duty (BCD) of 100 per cent. However, eligible imports originating from Bangladesh can avail exemption under SAFTA, subject to fulfilment of the prescribed Rules of Origin criteria.
DRI intelligence revealed that the syndicate was allegedly importing areca nuts originating from Indonesia, Thailand, Malaysia and other South-East Asian countries and falsely declaring Bangladesh as their country of origin to claim SAFTA benefits.
Following the intelligence inputs, DRI teams conducted simultaneous searches at premises linked to importers, Customs Brokers and IEC holders in Kolkata (West Bengal) and Visakhapatnam (Andhra Pradesh).
Several incriminating documents and evidence indicating the South-East Asian origin of the consignments were recovered.
The officers also seized around Rs 75 lakh in cash, suspected to be proceeds from the sale of illegally imported goods, and intercepted a live consignment containing around 160 tonnes of areca nuts.
Investigations revealed that the syndicate was allegedly routing South-East Asian areca nuts through an Export Processing Zone in Bangladesh before sending them to India after changing containers and bags and passing them off as Bangladeshi-origin consignments.
The masterminds allegedly arranged fraudulent SAFTA Certificates of Origin from Bangladeshi authorities and charged substantial commissions from Indian importers for routing, documentation, customs clearance and transportation of the consignments.
The investigation also revealed the alleged use of hawala channels and dummy entities for movement and layering of the proceeds.
DRI said the fraudulent imports had resulted in customs duty evasion exceeding Rs 2,500 crore in recent years.
It also found that one Customs Broker firm was responsible for clearing most of the fraudulent consignments identified in the case.
The firm’s Customs Broker licence has been suspended by the competent authority.
Nine persons have been arrested so far and further investigation is underway.
The DRI said such illegal imports adversely affect domestic areca nut growers and legitimate businesses by causing price distortion and creating an uneven playing field.
The activities also result in substantial revenue loss to the government and undermine regulated trade practices and economic security in border regions.
The operation has disrupted a well-organised network allegedly involved in systematic mis-declaration of country of origin, fraudulent availment of SAFTA benefits and large-scale evasion of customs duty.
TNT KM
