Page 70 - DRI ANNUAL REPORT EBOOK

International trade is witness to conflicts and complexities that emanate from, amongst other things, the inherent and often inevitable tension between trade profits and governmental protection of health, safety and the environment. The challenges for Customs administrations in their role towards ensuring safety and health of populace are enormous. As opined by the World Customs Organization, the coordinated work of Customs and other law enforcement agencies is of paramount importance to “reverse the trade in counterfeit goods, such as medicines, toys, foodstuff, spare parts, which are silently killing people while criminal networks rake in colossal profits”1.
DRI has continued to diligently exercise this mandate, effectively juxtaposing the provisions of the Customs Act with those of the Allied Acts like COTPA, FSSAI, the Drugs and Cosmetics Act, Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, etc and enforcing them. That the efforts of the DRI met with significant successes would be patent from the following
CIGARETTES AND TOBACCO PRODUCTS
India has become the fourth largest and fastest growing illegal cigarette market in the world with smuggled ones accounting for a quarter of the domestic cigarette industry2. According to the Tobacco Institute of India (TII), illegal cigarette trade comprising internationally smuggled and locally manufactured tax-evaded cigarettes accounts for as much as one-fourth of the cigarette industry in India. The TII opines that India is a vulnerable target destination for smuggled cigarette trade operators given its vast land and sea borders and the “attractive tax arbitrage due to punitive taxation on cigarettes”3. Further, smuggled cigarette brands “find a ready market in the country with existing demand, easy accessibility and cheaper prices compared with domestic legal cigarettes”4. Besides the lucrative profits by way of evasion of customs duty, smuggled cigarettes are generally devoid of the mandated pictorial
warnings under the Cigarettes and Tobacco Products Act.
Furthermore, the cigarettes smuggled into India have their origin rarely identifiable, as the country of manufacturing is deliberately not stated by trade operators; seizure incidents suggest that container loads, railway freight, road transport, personal baggage and head-loads are used to move stocks across international borders and within the country5. The enforcement activities of the DRI in respect of seizure of cigarettes and other tobacco products agrees with the views of TII in terms of the diversity of the modus and the clandestine manner in which the said smuggling activities are carried out. Some of the significant seizures of DRI read as under:
a. In October 2019, the DRI Delhi Zonal Unit inspected a godown which resulted in recovery of 56.54 lakhs sticks of
1 World Customs Organization (2019), Enforcement and Compliance- Illicit Trade Report 2019, p.120.
2 The Times of India, December 17, 2019, “Smuggled cigarettes form 25% of domestic industry”.
3 The Tobacco Institute of India (2019), Illegal Cigarette Trade Poses A Huge Threat to India: Impacts Livelihood,
Deprives Government of Revenue & Promotes Organized Crime, p.8. 4 ibid.
5 The Times of India, December 17, 2019, “Smuggled cigarettes form 25% of domestic industry”.
36 SMUGGLING IN INDIA REPORT 2019-20