The Hindu : Front Page : Industrialist, family members held

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Thursday, Jun 19, 2008
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Industrialist, family members held

Staff Reporter

Evasion of Central Excise duty to the tune of Rs. 5 crore alleged

One of the members of the Bhandari family absconding
The offenders procured copper ingots through fraudulent means

HYDERABAD: Umraumal Bhandari, a city-based industrialist and two of his family members, landed behind bars on Wednesday for allegedly evading nearly Rs. 5 crore Central Excise duty over the past five years.

Bhandari, 64, his son Surendra Prakash Bhandari, 43, and his younger brother P.R. Bhandari’s son Virendra Bhandari, 33, were arrested by the Central Excise Intelligence officials here. They were produced before the Economic Offences Court and remanded to judicial custody for 14 days. Officials were on the lookout for P.R. Bhandari who is absconding.

Fraudulent means

Their remand report, copy of which is available with The Hindu, stated that they adopted fraudulent means to avoid the Central Excise duty. Bhandari’s family owns M/s Cubex Tubings Limited (CTL) with registered office at Secunderabad and two manufacturing units at Patancheru on city outskirts and Pondicherry.

The CTL was into making copper tubes, rods and other products by procuring copper scrap from local market. As per Central Excise Act, duty should be paid on production of any goods.

To lessen their tax liability, according to the remand report, the company owners adopted a modus operandi of procuring copper ingots from different companies, applying for tax rebate.

Actually, the purchased copper ingots would not reach their company. They used to sell the same in local market without bills. But they would show the bills of purchasing copper ingots and claim the tax benefits. Thus, they allegedly evaded Rs. 5 crore excise duty, the report said.

The alleged evasion came to the fore when officials searched their factory two months ago and seized several documents. Official sources said the investigation was on to quantify the exact amount evaded and the role of other companies and transporting agencies in the offence.

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