Trader arrested for fraud worth Rs 8.70cr
COIMBATORE: A 42-year-old man running a foreign trade consultancy services firm was arrested bys Directorate of Revenue Intelligence sleuths, Coimbatore, on Tuesday evening for furnishing fake export bills to claim import tax benefits worth 8.70cr under the export promotion capital goods (EPCG) scheme. Under EPCG, companies should export a specified value of goods after importing machinery under the scheme to claim a waiver of import duty.
The arrested person has been identified as S Kishore of MSS Complex on Uthukuli road in Tirupur city. He was the managing director of Nandhishiv Impex, a foreign trade consultancy service.
According to the DRI sleuths, Kishore had imported more than 20 textile machinery from Germany and other European Union countries between 2003 and 2005, supplied the machinery to Arunkumar Spinning Mills, Alamelu Balaji Spinning Mills, both from Annur, PV Spinning Mills, Sathyamangalam and Chromaprint India private limited in Coimbatore.
The machinery worth 26.17cr was imported under the union government's EPCG scheme. According to the scheme, an importer can import textile machinery without payment of import duty and export goods manufactured by using the imported machinery, thereby earning foreign exchange. The import duty for the machinery is 8.70cr. As per the EPCG scheme, traders should export textiles worth 69.60cr within six to eight years to avail the import duty waiver.
However, the importers in Coimbatore, Annur and Sathyamangalam manufactured goods only for sale in the local market. No exports were made and no foreign exchange was realized. Meanwhile, Kishore and the four textile firms had fabricated export documents worth 69.60crore and obtained the export obligation discharge certificate from the directorate of foreign trade office, Coimbatore, to evade the payment of import duty worth 8.70cr.
Based on a tipoff, DRI sleuths conducted a raid at the four textile mills and office of the foreign trade consultancy services firms at Tirupur and seized vital documents. Imported machinery worth 26.17cr was seized from the four textile mills.
The sleuths arrested Kishore on Tuesday evening and produced him before the chief judicial magistrate court. Special public prosecutor for customs and central excise S Balasubramanian appeared on behalf of the prosecution. "Kishore got anticipatory bail from the Madras high court even though he cheated the union government to the tune of 8.70cr. The DRI strongly objected to the anticipatory bail following which it was cancelled," said Balasubramanian.
The chief judicial magistrate N Muralidharan has remanded Kishore to judicial custody till December 23. He has been lodged at Coimbatore central prison.
Source : timesofindia.indiatimes.com
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