Directorate of Revenue Intelligence has detected yet another instance of customs duty evasion by MRO-TEK Ltd, the Bangalore-based last mile networking company, whose three top executives were arrested last week on similar charges in two other cases.
DRI officials told rediff.com on Wednesday that ongoing investigations into the company's import of telecom equipment from its joint venture partner, RAD Data Communications Ltd of Israel, have revealed more duty evasion on products declared as repaired goods on which there is no duty though they were actually replaced by new products by its joint venture.
"The company officials could not establish their claim on the products that were sent to Israel for repairs as the same that were rectified and returned. By importing new products in the guise of receiving the repaired goods, the company has avoided paying customs duty on the fresh consignment.
Admitting to the lapse, the company has paid Rs 22 lakh (Rs 2.2 million) as an advance towards the duty evasion on June 29.
"Since investigations are still on, we are yet to assess the quantum of such products imported, their value and the amount of duty evaded," a DRI official stated.
This is the third instance of duty evasion by the delinquent company detected by the DRI during its investigations launched this January.
In the previous two cases, the company and its subsidiary, RAD-MRO Manufacturing Ltd, were found evading duty to the tune of Rs 6.7 crore (Rs 67 million) and Rs 1.7 crore (Rs 17 million) respectively on import of digital modems and other networking products between 1998 and 2000.
DRI sources said a show-cause notice was being issued to the company soon to explain their conduct and the modus operandi adopted to evade duty in the second case.
"The first case of evasion is still pending with the Settlement Commission in Chennai. The company has so far paid Rs 1 crore (Rs 10 million), and the balance amount is yet to be paid," sources disclosed.
Meanwhile, MRO-TEK has clarified that it had paid the advance amount under protest, pending adjudication proceedings.
Admitting to the duty evasion in the third instance, a company official said whatever happened, has happened. "We will take the judicial route and cooperate with the investigations being conducted by the DRI."
