Illegal gold import racket busted by DRI in Mumbai
DRI said duty-free gold that was allowed to be imported into India was not utilised by the exporter to manufacture any product
An illegal gold import racket was busted by the Directorate of Revenue Intelligence (DRI) in Mumbai with the seizure of gold worth Rs 1,000 crore and a consignment of 100kg Gold Potassium Cyanide (GPC) priced Rs 32 crore.
The GPC was confiscated at Air Cargo Complex, and two people have been arrested so far for alleged involvement in this case. They were subsequently produced in a local court, following which they were sent to judicial custody till July 21. As per DRI officials, there has been a duty evasion to the tune of Rs 338 crore and further investigation is currently underway.
Modus operandi
The buyers are suspected to spread across the big cities in India and the seized consignment of GPC was being exported by a Mumbai-based firm to Dubai. Also known as potassium Dicyanoaurate, GPC is mainly used in the electrolytic gold plating of metals.
People whose names came up in the racket claimed that the GPCs which they tried to send to Dubai were made of imported gold which was duty-free and this was done for post-value re-export. Further, the GPC was incorrectly declared as the resultant product of the aforementioned gold for which the Mumbai-based firm had permission under an Advance Authorisation (AA) license.
DRI said the duty-free gold that was allowed to be imported into India was not utilised by the exporter to manufacture any product, and instead it was melted, recast and sold for profits in the domestic market. This act was a grave violation of ‘Actual User Condition’ under the AA licence.
In addition to this, after selling the gold, the exporter procured GPC from a firm in Gandhinagar and wrongfully claimed that it was a resultant product made of the imported, duty-free gold, said DIR. The company came under the radar of the DIR when the agency found that it was engaged in the business of solar energy and had no relation with gold. The company had also imported GPC from Indonesia last week and had claimed a zero percent tariff concession benefit given by the ASEAN India Free Trade Agreement (AIFTA). Other documentary evidence suggested that GPC sent to Dubai was re-routed to Mumbai via Indonesia, through Gandhinagar, and it entered and exited India on a regular basis.