FinMin sleuths check RIL's SEZ records

In what appears to be an exercise aimed at greater vigil against any possible revenue leakage from special economic zones, the Directorate of Revenue Intelligence (DRI) today examined documents related to Reliance Industries' Jamnagar SEZ.

According to sources, an 18-member DRI team is looking into the end use of machinery imported for the project.

"Our officers are at RIL's Jamnagar SEZ and are examining some documents," said a spokesperson of the Central Board of Excise and Customs.

A Reliance Industries officials said, "The visit of the DRI officials was part of an exercise carried out by the Union Finance Ministry to verify the multi-purpose SEZ. It was not a raid on the SEZ or the existing export-oriented unit."

The DRI action comes shortly after the arrest of two officials of Essar's Hazira SEZ on the charges of non-payment of Customs and excise duties worth Rs 300 crore.

The 33-MTPA Reliance refinery, which is an export-oriented unit, is adjacent to the SEZ site.

The company is in the process of building the SEZ, which will house a 27-MTPA refinery, to be set up at a cost of Rs 25,000 crore. The inter-ministerial board of approval for SEZs had granted the 1,224-hectare SEZ a multi-product status after relaxing the contiguity norms.

In the Essar SEZ case, the tax authorities said the company violated rules by moving goods into the domestic tariff area, allegedly without paying the relevant duties. The duty was paid after the department of revenue stepped in. Essar has maintained that it has not violated any rules.

The finance ministry has been pushing for greater vigil over revenue losses from SEZs. Recently, it asked Reliance to take measures to ensure that there was no revenue leakage from the contiguity measures taken at its Navi Mumbai SEZ.

The finance ministry has estimated that by 2011, the revenue forgone on account of the tax sops given to SEZs will be close to $ 40 billion.