DGCEI Detects Evasion by Plywood Unit
PLYWOOD industry is well known for cash transaction as well as for duty evasion by not maintaining proper records. Since, the consumers of the product are mainly real estate and furniture sector, most of the transactions are made without accounting for the production in records, which suits both supplier and buyer. This ultimately results in unaccounted cash transaction and tax evasion. Although tax officials are aware of the working of the plywood industry, it is difficult to catch hold of cash transactions.
Recently, officers of the Directorate General of Central Excise Intelligence, Hqrs., R.K. Puram, New Delhi (DGCEI) have booked a case of huge evasion of Central Excise against a plywood manufacturer based at Distt. Sonepat (Haryana) and unearthed a novel modus operandi .
Several premises at Delhi Haryana Border, were searched by the officers of DGCEI on 19.7.2012 in Dist. Sonepat and Delhi. The searches reportedly resulted in recovery of voluminous incriminating documents indicating huge evasion of central excise duty. The officers also unearthed a secret office of a company and also seized Indian currency worth Rs. 69 Lacs from two premises, which were admitted as sale proceeds against clandestine sale by the directors of the company. Surprisingly, one of the units was not even registered with the Central Excise department.
Documents seized also revealed that in this evasion, a novel modus operandi was used by the tax evaders. The officers got hold of customized software, which automatically converts actual amounts to a number divided by 100. e.g. if the party has received Rs. 500000/- in cash, it will be captured by the software as 5000.00. This shows how tax evaders are using technology advantage to hide their transactions.
The estimated evasion of Central Excise duty is to the tune of over Rs. Ten Crores. The investigation of the case is under progress, according to sources.