This story is from March 12, 2020

Firms raided for dubious export incentives were found guilty by DRI official last year

Firms raided for dubious export incentives were found guilty by DRI official last year
Ludhiana: In a significant development related to March 6 raids by Directorate General of GST Intelligence (DGGI), New Delhi, on several Ludhiana and Delhi-based firms for allegedly filing bogus input tax credit claims worth Rs 61 crore, it has emerged that Chander Shekhar, additional director general (ADG) of Directorate of Revenue Intelligence (DRI), Ludhiana, who is under suspension after he arrested in an alleged bribery case, had already conducted an investigation against a majority of these firms last year in June.

The then ADG in his report had concluded that the Delhi-based firms had availed dubious export incentives of Rs 108 crore and four exporting firms were procuring bills for the same from 12 companies owned by a Ludhiana-based businessman. He is the same businessman, whose four firms were raided by DGGI on March 6. The inquiry which was being conducted by Chander Shekhar was handed over to the headquarters in October last year. From his note, a copy of which is in possession of TOI, it is clear that the ADG had shared the information about the fraud being conducted by these firms with other agencies like DGGI and the Enforcement Directorate (ED).
Sources said the then ADG had sent this information via a secret note to DRI headquarters in New Delhi. In his note sent on November 18, 2019, he had also claimed that the Delhi businessman who is kingpin of this racket, (who was later in the DGGI raids of March 6) would try and malign image of DRI officers investigating the case to derail the probe.
Almost one-and-a-half months after this, Chander Shekhar was arrested by CBI on January 1 for allegedly demanding bribe from a Delhi-based businessman through two other businessmen (Ludhiana’s Rajesh Dhanda and Delhi’s Anoop Joshi), who were known to him. Though ADG was later granted bail in this case, he continues to be under suspension.
Though senior officials from the department concerned have been found tight-lipped in the matter, the turn of events and the surfacing of secrete note has set off speculations in the bureaucratic circles.
What the ‘secret’ note said
In his secret note, then ADG Chander Shekhar has said, “It was observed that these four exporting firms owned by the Delhi-based businessman had availed export incentives of Rs 108 crores and four exporting firms were procuring bills from 12 companies owned by one Ludhiana-based businessman who had in past been a COFEPOSA detainee.”

“The transaction appeared suspicious and accordingly, DRI Ludhiana had issued a letter to Punjab State GST for providing complete chain of purchase of 12 firms. State GST, Ludhiana, started submitting investigation report to DRI Ludhiana which prima facie indicated bogus purchases and supplies by companies owned by this Ludhiana businessman,” the note said.
“Punjab State GST also submitted a comprehensive 46-page final investigation report in respect of all 12 companies owned by the Ludhiana businessman to DRI, which indicated that purchase of the said 12 firms appeared to be bogus as the trail down the suppliers became nil in each of the 12 companies. The question arose that if the procurement of 12 companies of Ludhiana are bogus, as indicated by Punjab GST reports, the supplies made by them to four exporting firms based in Delhi are bogus too and therefore the nature of goods exported by these four companies needed to be investigated. The entire case appeared to be case circular trading of invoices of over Rs 2,000 crore by creating a maze of fictitious companies,” the official had written.
“It’s worthwhile to mention here that on these suspected exports, four exporting firms of Delhi businessman had availed export incentives of Rs 108 crore. The foreign remittances received to the tune of Rs 1,000 cr to Rs 1,500 crore (presuming export incentive to be in range of 7.5% to 10%) also therefore appeared to be of doubtful nature. DRI, Ludhiana transferred the investigation of 12 firms of Ludhiana businessman to DGGI HQ along with 46-page report of Punjab State GST as the subject matter of fraudulent ITC/GST was not in domain of DRI,” Chander Shekhar had added.
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About the Author
Mohit Behl

Principal Correspondent with Times of India, reports about Income tax, GST, ED, DRI, Customs, CBI, CBIC,CBDT, business, financial crime,banks,politics.

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