A multi-crore rupee fraud of bogus exports that appears to have made a mockery of the Central government’s export benefit scheme has been caught by the Central Bureau of Investigation, which is now scanning the past six years’ export entries at the Jawaharlal Nehru Custom House, Nhava Sheva, in Maharashtra’s Raigad district.
A case of criminal conspiracy, cheating, forgery and criminal misconduct by public servant has been registered by the probe agency, which unearthed the racket of causing wrongful loss to the exchequer through fraudulent disbursement of duty drawback amount of Rs 4,74,90,899 in one case. In two separate cases, involving similar modus operandi, duty drawback amounts of Rs 4,04,90,661 and Rs 7,08,615 were also disbursed in 2017.
Duty drawback is a scheme administered by CBIC to promote exports. It rebates the incidence of Customs and Central excise duties, chargeable on imported and excisable material respectively, when used as inputs for goods to be exported. In these cases, the goods were never exported but the rebate against the purported exports were availed under the Central government’s export promotion scheme.
The role of 17 customs officials, mostly superintendents of customs and preventive officers, posted at the port and a dozen exporters is under CBI scanner as the accused, in furtherance of the said criminal conspiracy, prepared, filed and processed the bogus/forged over 250 shipping, without physical movement of goods, without examination of actual documents/containers, passed the Let Export Orders (LEO) for these bogus/forged shipping bills.
Over two dozen companies with import export code (IEC) are also facing an investigation as they were involved in the criminal conspiracy as part of which container numbers of these shipping bills were fraudulently inserted in Export General Manifest (EGM) by private accused persons and shown as the goods were exported from JNCH port. Whereas in reality these containers did not leave Indian shores.
CBI investigators have now decided to examine the Export General Manifest records of the previous six-year period. The EGM is the document which is to be filed by shipping lines or their agents declaring the consignments along with the relevant particulars like shipping bill number and number of containers or packages which have been loaded on the vessel for taking these out from India.
Earlier in 2017, an investigation by the Directorate of Revenue Intelligence (DRI), Mumbai Zonal Unit, unearthed a syndicate of persons involved in the fraudulently availing duty drawback by filing bogus shipping bills. At least 17 officers of Customs were found to be involved in the processing of these bogus shipping bills involving freight on board (FOB) value of more than Rs 100 crore and the total amount of fraudulent duty drawback suspected to be siphoned off in the matter was more than Rs 10 crore.
Interestingly, during the CBI’s investigation one accused in the fake export case alleged that public servants conducting an inquiry against them were demanding bribes to settle the case favourably. Key accused Sanjay Shinde, based out of Navi Mumbai, alleged that public servant Shylender Kumar Singh, while posted and functioning as Inspector (Preventive Officer) at Special Investigation and Intelligence Branch. Export, JNCH, Nhava Sheva, initially demanded Rs 1 crore as illegal gratification for not parting with the export documents of the bogus/forged shipping bills and after negotiations agreed to accept Rs 25 lakh from Shinde and to receive Rs 10,000 per bogus shipping bill to be submitted in future.
It was further alleged that in furtherance of the said criminal conspiracy an amount of Rs 25 lakh was delivered by Shinde to Shylender Kumar Singh through Swami Dhobale in three instalments of Rs 10 lakh, Rs 5 lakh and Rs 10 lakh respectively. It has been further revealed that Dhobale was working with Shinde in his export business. Both the accused have denied these charges. The CBI has now registered a case of criminal conspiracy, bribery, misconduct by public servant by taking illegal gratification, abetment by giving bribe to public servant.