Rs 100 cr central excise duty evasion unearthed in New Delhi

The Revenue Department on Monday said a major case of central excise duty evasion estimated at Rs 100 crore has been detected and two Mandi Gobindgarh based dealers have been booked in this connection.

Dealers Sai Steel Traders and Sai Multimetals have been booked by Directorate General of Central Excise Intelligence (DGCEI) for misuse of Cenvat credit, the Central Board of Excise and Customs (CBEC) said in a statement.

“The search operation conducted by the DGCEI (Hqrs) indicates massive and rampant misuse of cenvatable invoices. The fraudulent availment of Cenvat credit and consequent loss of revenue is estimated to be in the range of Rs 100 crore,” it added.

DGCEI (headquarters) booked the case of misuse of cenvat credit by the dealers “for issuing cenvatable invoices fraudulently to furnace units of Mandi Gobindgarh etc. without actually supplying the goods,” CBEC said.

It said preliminary scrutiny of seized documents indicated these cenvatable invoices have been generated against the goods and duty paid invoices of old and used plates received from the ship breakers of Bhavnagar, Gujarat.

“Vital evidences gathered indicate that the dealer-manufacturer nexus was in play which goods were sent to rolling mills and invoices were issued to the furnace units.

In this manner, a huge amount of inadmissible CENVAT Credit was passed fraudulently to these furnace units without supplying the goods,” it said.

The case, CBEC said, is another case of evasion of Central Excise duty by way of mere paper transactions without actual supply of goods thereby causing a huge loss to the country’s revenue.