The Chennai zonal unit of the Anti Evasion Directorate has detected excise evasion amounting to over Rs 1.5 crore by scrap steel dealers who had bought the material from the Trichy unit of Bharat Heavy Electricals Ltd.
According to the directorate, two scrap steel dealers were issuing invoices to various steel mills in and around Chennai without supplying steel scrap resulting in fraudulent availment of modvat credit by the steel mills.
Based on the intelligence received by the directorate, the residential premises of one of the key operators and the office-cum-godown premises of 2 registered dealers were searched by the officers of the DGAE, Chennai.
The documents recovered revealed that assorted steel pipes auctioned by Bhel, Trichy as scrap were purchased by the registered dealers in Chennai and directly sent to parties in places like Calcutta, Delhi and Rajkot.
However, the scrap material did not reach the registered dealers in Chennai or the steel mills in Chennai in favour of whom these dealers had issued invoices against the bills of Bhel.
During the course of enquiry, the officials found two other registered dealers who were also issuing bogus invoices without supplying scrap to various mills in Chennai. A search conducted at the premises of these dealers also revealed incriminating documents. The enquiries conducted by the directorate so far has revealed that the so-called registered office-cum-godowns existed only on paper. No business was carried out from these office-cum-godowns nor was any material received at any point of time, say excise department officials.
When interrogated, the persons who were employed to prepare the bogus invoices said no scrap was supplied to the steel mills. This enabled the person in whose favour the invoices were issued to avail of modvat credit on the strength of such invoices issued by the registered dealers of Central Excise.
According to excise department officials, the main transporters for the registered dealers in Chennai have also confessed that no Bhel scrap was sent to the Chennai registered dealers or steel mills in Chennai and that the Bhel scrap was sent directly to various parties in Calcutta, Delhi etc.
The search of the residential premises of these transporters have also resulted in the recovery of incriminating documents by the officials.
