Major Customs Duty Evasion Racket Busted by DRI in Mumbai
The Directorate of Revenue Intelligence (DRI), Mumbai Zonal Unit, has made a significant breakthrough in a high-stakes customs duty evasion case, resulting in the arrest of a Dubai-based trading firm proprietor. The investigation centers on the systematic undervaluation of imported inshell walnuts, which has allegedly caused a staggering loss exceeding Rs 139 crore to the government exchequer.
Intelligence Leads to Uncovering of Elaborate Scheme
DRI officials acted on specific intelligence indicating that M/S Deepak Trading Co., with registered offices in Gujarat and Surat, was involved in importing inshell walnuts from Chile through Nhava Sheva Port using a fraudulent undervaluation strategy. This scheme was designed to evade both Basic Customs Duty and Integrated Goods and Services Tax (IGST).
The modus operandi involved a sophisticated invoice manipulation process. Instead of submitting the actual invoices issued by Chilean suppliers to Indian Customs, the importers provided undervalued invoices from UAE-based third-party entities. These falsified documents were tailored to meet the specific requirements of the Indian importers, significantly reducing the declared value of the goods.
Arrest and Investigation Details
The DRI conducted comprehensive searches and meticulously analyzed export documents and invoices. This forensic examination revealed that the undervaluation ranged between 50 to 70 percent of the actual value. The agency subsequently arrested Makbul Ahmed Siddiq Dhoki (49), the owner of Dubai-based Euro Seven General Trading LLC.
Dhoki was intercepted at Ahmedabad International Airport upon his arrival from the UAE. In court, his advocate, Sujit Sahu, contended that his client had paid all applicable duties to Customs and dismissed the allegations as baseless. However, DRI officials presented evidence suggesting otherwise.
Confession and Further Complications
During interrogation, the accused reportedly admitted to providing undervalued invoices to Indian importers in exchange for commissions. The investigation has uncovered that the UAE-based firm supplied these fraudulent invoices to three importers: Dipak Kiryana Stores, Dipak Trading Co., and Angel Enterprises.
The case has taken a more complex turn with allegations of non-cooperation and additional financial crimes. The DRI informed the court that Dhoki had formatted his mobile phone, potentially destroying evidence, and was not cooperating with the investigation. Furthermore, the agency suspects the involvement of hawala transactions and international money laundering, necessitating custodial interrogation to trace financial flows, identify other accomplices, and prevent further evidence destruction.
Legal Proceedings and Broader Implications
The court has remanded the accused to judicial custody, underscoring the seriousness of the charges. This case highlights the ongoing challenges in combating cross-border trade fraud and the critical role of agencies like the DRI in safeguarding national revenue.
The arrest marks a crucial step in addressing a sophisticated evasion network that exploited international trade channels to defraud the Indian government of substantial customs revenue. The DRI continues its investigation to unravel the full extent of this financial conspiracy.
