Gold importers evaded Rs 338 crore in customs duty; kingpin held in Bengaluru

BENGALURU: In the biggest operation of Directorate of Revenue Intelligence’s Bengaluru unit in recent times, a gang which imported gold bars worth over Rs 1,000 crore and evaded Rs 338 crore in customs duty over nearly a three-year period was busted. The Mumbai-based kingpin was nabbed along with his woman associate after an illegal consignment of gold potassium cyanide worth Rs 32 crore was seized at Mumbai airport.
DRI sources identified the kingpin as Rajesh, 64, owner of a Mumbai-based chemical industry. They said he was bringing in gold bars from the Gulf by misusing the import duty exemption option of the advance authorisation scheme under Foreign Trade Policy. The scheme provides for exemption from import duty for materials that are used in manufacture of goods exclusively for the export market.
‘He circumvented scheme’
“Rajesh smartly used the government scheme to bring in gold bars from Dubai and instead of melting and using them to make gold potassium cyanide as per the exemption condition, he began selling the bars to illegal dealers. He entered into a secret pact with a relative in Gandhinagar, Gujarat, who would export the gold potassium cyanide to the Gulf, claiming it would be used in manufacture of electronics and heavy machinery,” said an investigating officer.
With Bengaluru DRI recently receiving specific intelligence inputs that a Mumbai-based gang with possible links in south India had managed to bring in 2,400kg of gold bars into the country without paying a single rupee in import duty, a team was formed and probe commenced. “We were stunned by the modus operandi of the fraudsters as gold bars worth over Rs 1,000 crore legally imported were being illegally diverted to gold dealers. The so-called end-product, gold potassium cyanide, was separately mixed in Gandhinagar to be exported to Dubai as a legal product, which was sent back to India via Indonesia using the ASEAN India Free Trade Agreement attracting duty exemption,” explained a Bengaluru DRI investigator.
Bengaluru DRI sleuths along with their Mumbai counterparts seized an export consignment of 100kg of gold potassium cyanide at the Mumbai air cargo complex on Friday. Rajesh and his aide were arrested on Saturday on charges of running the illegal operations since late 2018 and amassing crores of rupees in profit, sources added. Further probe is under way into Rajesh’s links in south India, mainly with illegal gold dealers.