New Delhi: Areca nuts sourced from South-East Asian countries were allegedly passed off as Bangladeshi products to claim customs duty exemption in India, with the Directorate of Revenue Intelligence (DRI) estimating a revenue loss of more than Rs 2,500 crore.
The investigation has led to the arrest of nine people, while around 160 metric tonnes (MT) of areca nuts and Rs 75 lakh in cash have been seized.
SAFTA Benefit Misused
Areca nut imports into India normally attract a Basic Customs Duty (BCD) of 100 per cent.
However, qualifying imports originating from Bangladesh are fully exempt from customs duty under the South Asian Free Trade Area (SAFTA) agreement, provided they meet the required Rules of Origin.
According to the Finance Ministry, DRI intelligence indicated that some groups were allegedly misusing this benefit on a large scale.
Origin Allegedly Changed
Investigators found that areca nuts were allegedly sourced from Indonesia, Thailand, Malaysia and other South-East Asian countries.
However, the country of origin was allegedly declared as Bangladesh while importing the goods into India.
This enabled the importers to claim SAFTA duty benefits that they were allegedly not entitled to receive.
Searches At Multiple Locations
The DRI conducted simultaneous searches at premises connected with importers, customs brokers and Importer Exporter Code (IEC) holders in Kolkata and Visakhapatnam.
Officials recovered documents and other evidence that they said established the South-East Asian origin of the areca nuts.
Around Rs 75 lakh in cash, suspected to be proceeds from illegally imported goods, was also recovered.
Rs 2,500 Crore Loss
The investigation has so far indicated that the alleged fraudulent imports resulted in customs duty losses exceeding Rs 2,500 crore in recent years.
The licence of the customs broker linked to the case has also been suspended.
Further investigation into the import network and other people potentially involved is continuing.
