Mumbai: Directorate of Revenue Intelligence (DRI) seized a consignment of 100 kg of Gold Potassium Cyanide (GPC) with a declared value of Rs 32 Crores at the Air Cargo Complex, Mumbai.
GPC is also known as Potassium dicyanoaurate and its primary application is in the electrolytic gold plating of metals.
The seized consignment was being exported to Dubai by a Mumbai-based firm. The receiving entity at Dubai was a closely linked entity to the exporting firm at Mumbai.
The GPC attempted to be exported was falsely declared to be the resultant product made from the duty-free import of gold that the Mumbai-based firm was permitted to bring in as input against an Advance Authorization (AA) license.
Advance Authorisation is a duty exemption scheme available under Chapter 4 of the Foreign Trade Policy (FTP) 2015-2020, where a manufacturer exporter or merchant exporter tied to supporting manufacturer can bring in duty-free import of goods as inputs which are to be physically incorporated in export products.
The DRI said Mumbai-based exporter never manufactured any export products out of the duty-free inputs that it was permitted to import. Instead, it diverted the imported duty-free gold to the domestic market at a profit, by melting and recasting it. This effectively led to the violation of the 'actual user condition' imposed under the AA Scheme.
The DRI noted to fulfill its export obligations under the Advance Authorisation Scheme, the Mumbai-based exporter would procure the GPC from a connected firm based at Gandhinagar, inaccurately claiming it to be a resultant product made of the imported gold brought in duty-free under the AA.
The connected firm at Gandhinagar was otherwise in the business of Solar Power Energy Solutions, an EPC Company. The Gandhinagar firm had imported this GPC, in the previous week, from Indonesia by claiming benefits of the 0% duty concessions available under the ASEAN India Free Trade Agreement (AIFTA).
Documentary and other evidence collected so far indicate that the GPC, which was exported to Dubai, was moved again to Indonesia to be supplied back to Mumbai company through its linked concern at Gandhinagar, thereby demonstrating and establishing a deliberate and illicit cyclical sequence of supply of the same goods. The estimated duty evasion is Rs 338 crores.