Mulberry silk import-export scam likely to cross Rs 300 cr

AHMEDABAD: The customs duty evasion scam in the import and export of mulberry silk could well cross Rs 300 crore. The scam was unearthed by Ahmedabad zonal unit of Directorate of Revenue Intelligence (DRI), on Saturday, and initial investigations had revealed duty evasion of Rs 100 crore under duty-free advance authorization scheme. DRI officials had also arrested two men- Jitendra Mistry and Kaumil Ranpura.
According to DRI sources, the duty evasion scam can be above Rs 300 crore as indicated by further investigations.The sources further said that Ranpura, along with a Bangalore-based mastermind, was running the scam since 2011-12.
“Ranpura belonged to Morbi and was born and brought up in Ahmedabad. He used to make ornaments on daily wage for various jewellery shops in Manek Chowk. He was also used to gamble in matka (local betting). Here he came in contact with Ashish Agrawal from whom he learnt the tricks to evade customs duty,” said a source.
“Along with the Bangalore-based mastermind, Ranpura and Mistry set up fake merchant exporter firms. Mistry was paid Rs 15,000 every month just to sign the cheques. Ranpura, too, was paid Rs50,000 every month by the Bangalore-based mastermind. Also, all people in whose names were used to create fake exporter firms were paid Rs5000-Rs 12,000 every month,” added the source.
While everything was going smoothly, Agrawal died of cancer, and the mastermind in Bangalore took over full charge of the operation. He and Ranpura managed to get permits and other documents cleared from central excise and the office of the Joint Director General Foreign Trade (DGFT) Ahmedabad to import duty-free mulberry through Chennai port.
In this case, fake merchant accounts were used to import mulberry silk through Chennai and it was showed on paper that it was being supplied to an EOU (export oriented unit) in Dhrangadhra. The finished product, in this case the silk fabric, was neither manufactured nor exported from this EOU. The EOU was based out of rented residential premises. The people behind these fake exporters claimed exemptions worth crores of rupees, and they sold the silk in domestic markets at huge profit margins.