Mumbai, Jul 22 (PTI) The Directorate of Revenue Intelligence (DRI) has busted a fraud involving large-scale undervaluation and misdeclaration in the import of premium luxury furniture, and arrested three persons in Mumbai, officials said on Tuesday.
Acting on specific intelligence, DRI officials conducted extensive searches across multiple locations, including business premises, warehouses, offices of freight forwarders, customs brokers and other associated entities, an official said.
The investigation has exposed a network involved in massive undervaluation and misdeclaration of branded luxury furniture operating across multiple jurisdictions, he said.
It involved the use of dummy importers (importer exporter code holders), local intermediaries, overseas shell entities, and fabricated invoices and related documentation to systematically undervalue branded luxury furniture, he said.
The investigation revealed that the beneficial owner, a well-known pan-India luxury furniture brand, was sourcing luxury furniture from reputed Italian and other European brands.
However, invoicing was being done in the names of shell companies based in jurisdictions such as Dubai, while the goods were shipped directly from Europe to India, he said.
In parallel, fabricated invoices were through a Singapore-based intermediary for falsely declaring the goods as unbranded furniture at significantly undervalued rates to Customs for clearance in the name of dummy importers, he said.
Once cleared through Customs, the goods were transferred on paper to the intended beneficial owner via a local intermediary created for this purpose, while in reality the goods were directly sent to the beneficial owner or the customer at the direction of the beneficial owner of the whole scam, he said.
As per the preliminary findings, a gross undervaluation of 70 per cent to 90 per cent of the actual transaction value, resulting in estimated customs duty evasion of approximately Rs 30 crore, he said.
The beneficial owner, the importer, and the intermediary have been found in complicity and close conspiracy with each other for executing the whole modus operandi to evade a huge amount of customs duty, he said.
DRI officials arrested three individuals on July 21 and 22 under provisions of the Customs Act, he said. PTI DC NP
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