DIAMOND RACKET TO PARK
CRORES
IN DUBAI, HONG KONG BUSTED
From Jal
Khambata
NEW DELHI, July 15: The Directorate of Revenue
Intelligence has busted a rough diamond import-export racket by a
Mumbai-based syndicate to siphon off and park crores of rupees in
Dubai and Hong Kong.
Three Jains, who were kingpins of the
syndicate and related to each other personally and in business, were
nabbed in Mumbai on July 4. They had established their offices in
Mumbai, Surat, Dubai and Hong Kong to hoodwink the authorities as the
diamond dealers.
They are accused of inflating the import
bills to park as much as Rs 214 crores abroad in a short span of
three months as already unearthed while investigations are still on
to assess the staggering drain of foreign exchange and evasion of
import duty involved in the racket.
The DRI suspects that the
money so parked abroad can be used to pay substantial cost of other
materials and then import them at gross undervaluation to cheat on
the import duty.
As many as 13 consignments imported at the
declared value of Rs 44.73 crores have been seized in Mumbai while
six consignments that arrived by a Cathay Pacific flight on May 18
and by an Emirates flight from Dubai on May 20 have been detained at
Surat's "Hira Bourse" as they are also suspected to be part
of the same racket. Their valuation has not yet been completed.
The
recipient of four of the 13 seized consignments valued at US$
43,01,497 (about Rs 20.65 crores) as per the accompanying sale
invoice even sought to disown them but without success. Their actual
value was assessed to be only Rs 1.06 crores).
The modus
operandi adopted by the three accused running four companies in
Mumbai was to export rough diamonds to Dubai and Hong Kong where they
were declared as items meant for re-export to get the customs duty
exemption. The same were repacked with over-valuation to the tune of
10 to 20 times, imported back to India and cleared at nil rate of
duty under a scheme notified in the Union Budget last year to promote
the diamond trade.
"If an export is done from Mumbai, the
import of the same is done through another firm of the same group at
Surat and that by such device the syndicate is able to launder money,
most of which is to cover differential value of other imports or the
said money is meant for other unlawful dealings," the DRI
sources.
They said the fraud was unearthed by the Mumbai
branch of DRI which get cracking in the month of May following an
intelligence tip-off about one such consignment with inflated bill
arriving in Mumbai by an Emirates flight on May 18.
By the
time the DRI swooped over the diamond bourse of the MMTC who are
custodians of such imports, half of the consignments had already been
cleared. It, however, detained the remaining 13 consignments on May
21.
The accused claimed to have sold the imported rough
diamonds to traders in Surat but they could not produce any records
about disposal of the rough diamonds and hence the DRI suspects that
they were exporting and re-importing the same stock again and
again.
The culprits arrested are Gautam Chunilal Jain, Anil
Bhavarlal Jain and Uttam Jain while the DRI sources said more arrests
will follow as the investigations progress. Their four companies so
far identified by the DRI officials were all located in the same
building called Pancharatna at Opera House in Mumbai. These are:
Rainbow Expotrade Pvt Ltd, Raj Gems Pvt Ltd, Sundrem Gems Pvt Ltd and
Madhur Gems Pvt Ltd.
Anil is related to Gautam while his
father is the working director of Sundrem belonging to Uttam. The DRI
is also looking into the business affairs of Madhur Gems run by Uttam
as one of its directors, Navneet Jain, is also a director in the
company of Gautam. Another firm of Navneet, Dhara Stock Brokers Pvt
Ltd, is also under investigation as it was also involved in import of
large quantity of rough diamonds.
The importers are required
to file Bills of Entry for clearance of the consignments. Six
importers had filed these to get released their imported goods. Two
of these consignments belonged to the accused. Their declared value
was US$ 14,72,672 (Rs 7.07 crores) while the actual value assessed
was US$ 7,36,335 (Rs 3.53 crores).
The valuation of the
remaining seen seized consignments carried out on June 18 opened the
eyes of the DRI officials as they were only worth Rs 71,37,603 while
the seized sale invoices showed them to be of the value of Rs
37,66,38,922. The DRI decided to register the case following the
valuation done by the expert panel as the accused had indulged in
over-valuation of the nine consignments alone to the tune of Rs 40.48
crores.
Holding these nine consignments as "mis-declared
in value", the DRI has already served notices on the parties
that these are "liable to confiscation under Section 111 of the
Customs Act 1962."
In the case registered with the
Additional Chief Metropolitan Magistrate, 3rd Court, in Mumbai,
Gautam Jain is accused of swindling Rs 113.96 crores by way of
imports of rough diamonds from Dubai and Hong Kong for his firm
Rainbow Expotrade Pvt Ltd and another Rs 3 crores from Antwerp and
Israel in the name of his proprietary firm Roshan Gems. Anil Jain,
who is his relative, has been charged with huge import of rough
diamonds worth Rs 90 crores while the third accused Uttam Jain is
charged with the fraud of Rs 7.09 crores.
###