Bengal firm caught evading Rs 19 crore import duty misusing ‘Make in India’ incentive, DRI arrests directors

DRI has arrested directors of a Kolkata-based company on charges of importing completely knocked down (CKD) kits of e-rickshaws by falsely declaring these as spare parts of electric tricycle.

Updated: Jul 27, 2018 17:01:00

By HT Correspondent

Popular in the district towns and suburbs, e-rickshaws are commonly called Toto in Bengal. (HT File Photo)

Directorate of Revenue Intelligence, Kolkata, has busted a Bengal-based company that has been allegedly misusing incentives offered by the NDA government to Indian entrepreneurs who manufacture eco-friendly vehicles under the ‘Make in India’ programme.

The company has been charged with evasion of import duty to the tune of Rs 19 crore over a period of four years by making false declarations about goods worth Rs 150 crore imported from Hong Kong.

On Monday, DRI officials arrested Golam Moinuddin and Mazibur Biswas, directors of Zeniak Innovation India Ltd, a Kolkata-based company, on charges of importing completely knocked down (CKD) kits of e-rickshaws by falsely declaring these as “spare parts of electric tricycle,” a senior DRI official in Kolkata said on condition of anonymity.

Read: South Korea’s participation in Make in India has helped create jobs: Modi

The company, which has a warehouse at Sankrail in Howrah district, allegedly claimed that the facility was actually a factory where e-rickshaws were manufactured. These light vehicles are commonly called Toto in Bengal and are extremely popular in district towns and suburbs where roads are narrow.

“To encourage manufacturing of eco-friendly vehicles inside the country the Centre has set a low import duty of 10 per cent on parts of electric vehicles. But this company was importing complete vehicles in CKD condition with pre-assembled transmission mechanism that attract 30 per cent import duty,” the DRI official said.

While producing the directors of Zeniak Innovation India Ltd. before a Kolkata court, DRI said the company imported complete e-rickshaws in CKD condition but the components were split into a number of consignments. Since no single consignment contained all parts of an e-rickshaw the company claimed benefit of the Central incentive by declaring these as parts and spares.

Read: Indigenisation of metro components can boost the Make in India project

“Also, preassembled differentials were declared in import documents as rear axles to avoid correct classification. Investigations revealed that motors, tyres and alloy rims were not declared at all,” said the DRI official.

DRI officials raided the Sankrail facility but could not find any machine that is normally used to manufacture differentials or other parts of e-rickshaws.

“There was nothing inside the so-called factory that could justify the lower rate of duty offered to encourage indigenous manufacturing. The premises were used as a warehouse to stockpile CKD kits and we found simple tools used to assemble these,” the DRI official added.

First Published: Jul 27, 2018 17:01:00


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