New Delhi, Aug 16 — The Directorate of Revenue Intelligence (DRI) has dismantled a major network allegedly involved in illegally importing South-East Asian areca nuts into India by falsely declaring them as Bangladeshi-origin goods to fraudulently avail concessional duty benefits under the South Asian Free Trade Area (SAFTA), the Ministry of Finance said on Sunday.
The investigation has so far revealed a potential revenue loss of more than Rs 2,500 crore, while nine persons have been arrested in connection with the case.
The import of areca nuts into India attracts a Basic Customs Duty (BCD) of 100 per cent. However, eligible imports originating from Bangladesh can receive full customs duty exemption under the SAFTA agreement, subject to compliance with the prescribed Rules of Origin criteria.
According to the DRI, intelligence gathered during a month-long operation revealed that certain syndicates were exploiting the SAFTA provisions on a large scale. The syndicates were allegedly sourcing areca nuts from Indonesia, Thailand, Malaysia and other South-East Asian countries, but mis-declaring their country of origin as Bangladesh when importing them into India.
Following the intelligence inputs, the DRI conducted simultaneous searches at multiple premises linked to importers, Customs Brokers and Importer Exporter Code (IEC) holders in Kolkata and Visakhapatnam. During the searches, officers recovered several incriminating documents and other evidence indicating the South-East Asian origin of the areca nuts.
The DRI also seized around Rs 75 lakh in cash, suspected to be proceeds from the illegal imports, along with a live consignment containing around 160 metric tonnes of areca nuts.
The investigation has revealed that the syndicate allegedly routed areca nuts from South-East Asian countries through an Export Processing Zone (EPZ) in Bangladesh. The goods were then allegedly transferred into different containers and bags before being sent to India and passed off as Bangladeshi-origin areca nuts.
The syndicate is also alleged to have fraudulently obtained Certificates of Origin from Bangladeshi authorities to support the false declarations and claim SAFTA benefits. The masterminds reportedly charged substantial commissions from Indian importers for arranging the routing, documentation, customs clearance and transportation of the consignments.