A blatant case of fraud involving export of a clothing item to Saudi Arabia by fictitious firms has come to the fore at the Air Cargo Unit (ACU), Delhi.
A total of 85 shipping bills were filed at the ACU on 16/10/2010 by these non-existent firms with 3,000 pieces of viscose scarves listed in each shipping bill. All the scarves were being exported – interestingly, to a lone buyer in Saudi Arabia – in collusion with a Custom House Agent (CHA) at ACU.
These fictitious firms as named in the bills were — M/S Alfa Exports, Alfa International, Aakrity Exports, Best Exports, Ebony Overseas, Essar Impex, Falcon Overseas, Magestic Overseas, Max Overseas, Palm Overseas, Poonam Overseas, Silverline Overseas, Seashore Exports, Varun International, and Velocity Impex.
The declared value of each scarf was Rs 325 while the actual value was not more than Rs 40 per piece, said sources. The exporter claimed 9.5 per cent drawback on FoB value.
The total drawback claimed on the bills came to a whopping Rs 75 lakh when the actual drawback should not have been more than Rs 10 lakh on the higher side.
Interestingly, the drawback amount claimed in each shipping bill was Rs 94000- Rs 95000, that is below Rs one lakh. The reason for this isn’t far to seek. Bills that amount to Rs 1 lakh and more are sent to the Shed Assistant Collector for further approval.
Sources also pointed out that on 16/10/2010, the administration had put three officers on duty but all the 85 shipping bills were strangely cleared by only one examiner. The reason behind this can only be dug out by the CBI sleuths as the matter relates to claims of fraudulent drawbacks by non-existent exporters.
Another question arises here: Not only the officer was working on a Sunday, he also cleared 85 shipping bills after examining them. If as many as 85 bills of the same items, that were marked below Rs 1 lakh and were addressed to the same consignee in Saudi Arabia, had come up for clearance, then why did the officer not feel the necessity of informing his senior officers?
It is also strange that the Additional Commissioner too did not notice any thing amiss about the large number of shipping bills of drawbacks below Rs 1 lakh. The role of Additional Commissioner, ACU, is indeed suspect here as it is his prime duty to monitor all the works pertaining to the export shed at ACU, drawbacks and work related to EDI systems as system manager for export commissionerate.
Sources said that all the shipping bills were examined by one Examiner, who has recently been transferred from Mumbai to Delhi by the CBEC. He is said to have examined goods at all warehouses on that day. It may also be brought to the notice that there is no sanctioned post for an Examiner in Delhi Commissionerate. Therefore, the board’s act of transfer this officer to Delhi too needs to be looked into as there is no dearth of inspectors in Delhi Commissionerate.
In the meanwhile, on 17/10/10, the Customs Preventive Delhi was informed about the bogus export and claims of excessive drawbacks.
The agency immediately started an investigation into the matter – only to find that all exporters mentioned above are non-existent, as all the addresses mentioned in the shipping bills were fake.
It immediately recommended to the ACU to withhold the drawbacks amounting to Rs 5.75 crore for earlier shipment of these so-called exporters.
This is not an isolated incident.The RTT, in its December 2009 issue, had brought out an article about export of waist jackets purportedly made of silk or leather or polyester that were being exported by M/S Space Enterprise from ACU, Export, New Delhi.
While the exporter had exorbitantly declared the value of each jacket as Rs 4,900 per jacket, the value of each, according to sources, was not more than Rs 200 approximately. The party had in October this 2009 filed shipping bills for export of the jackets, claiming drawbacks amounting to Rs 15 lakh approximately. The drawback claimed by the party should not have been more than Rs 1 lakh as the party had claimed drawback on each piece more than 30 times of the value of the goods.
What is the utility of creating the SIIB unit when they have no knowledge as to what is happening in ACU, New Delhi. Or, is it so that they had the knowledge of this shipment as well as of earlier shipments of exporters? Further, is the Directorate of Valuation meant only to monitor import prices only, when majority of the frauds are nowadays related to export valuation? All this calls for greater attention to details by CBEC.
Most surprisingly, no action is taken against any staff member, which clearly shows that it was a preplanned game allegedly in connivance with senior officers. CBEC should evolve a system whereby in every case of fraud on Customs or Excise side, a certificate will have to be given by the Commissioner heading the investigations that no involvement of staff was found and in case of systemic failure, what were the recommended changes in procedure.
Though the non-existent exporter are claiming fraudulent drawbacks right under the nose of the Customs, the ACU is sleeping over the matter. It is also not providing documents for investigation to the Customs Preventive, there making it apparent as to who all are facilitating such unscrupulous exports.
Even though such fraudulent drawback claims are on the rise, the ACU has refused to learn any lesson.