Corporate fraud: Rs 132 cr recovered from Pune region

The Directorate General of Central Excise Intelligence (DGCEI), Pune regional unit, has recovered a record Rs 132 crore and made three arrests in cases of corporate frauds in 2011-12. The frauds are regarding excise duty, customs duty and service tax evasion in manufacturing as well as the service sector in and around Pune. The recovery is a whopping 140 per cent more than previous year's figures.

In 2011-12, the DGCEI Pune unit registered about 25 cases of such frauds. While Rs 112 crore was excise duty recovery and about Rs 20 crore was recovered in the form of service taxes. In 2010-11, the Pune unit recovered Rs 55 crore from such offenders. S K Mishra, assistant director with DGCEI, Pune unit, said, "The modus operandi is planned by some of the best brains in the industry. The Pune unit, on an average, detects cases amount to Rs 200-250 crore." An officer said not all detections lead to recovery, which is done after adjudicating procedures.

The Pune unit has entire Maharashtra except Mumbai, which is handled by the Mumbai unit. Mishra said, "Recovery is made mainly from the big automobile units situated in and around Pune. Excise duty evasions came to light when under-valuation of motor vehicles was unearthed, and frauds in units manufacturing cement, sugar and steel. The three arrests were from the steel sector. We make arrests if there is a danger of suspects tampering with the evidence."

An officer said, "To evade taxes, one can fraudulently channelise a product stating wrong parameters or understate the rates of constituent material. Some units may not pay taxes at all. Such blatant evasion has been recorded in steel, gutkha and plywood units. Many times, we receive tip-offs from people within the industry, who are given 20 per cent tax-free share of the recovered duty or tax. Cases are also unearthed based on market study by our officers."

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