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89 Smuggling in India Report 2024-25

Case 11: Illegal diversion of raw areca nuts from EOU to domestic
market
In March 2025, DRI intercepted a truck at Patancheru Toll Plaza, Telangana,
carrying 8 MT of raw areca nuts illicitly diverted from a 100% EOU unit for
sale in the DTA. A follow-up search at the EOU revealed diversion of 21 MT of
raw areca nuts, replaced with low-grade areca nut powder. All these illegally
diverted goods were seized under Customs Act, 1962.

v. Misuse of Other Export Promotion Schemes

In addition, several other export-linked schemes, such as MEIS (Merchandise
Exports from India Scheme), SEIS (Service Exports from India Scheme), RoDTEP
(Remission of Duties and Taxes on Exported Products), and RoSCTL (Rebate of
State and Central Taxes and Levies), have also been exploited by some exporters
through inflated export value, manipulated classification, or fictitious documen-
tation. In some cases, shell entities have also been used to create fake export trans-
actions solely for availing export benefits.

Case 12: Wrongful RoDTEP rebate claim on export of PowerEdge
servers

In December 2024, DRI detected a case where
an exporter has wrongly claimed a rebate
under the RoDTEP Scheme on the export of
PowerEdge Servers classified under HS code
84715000. The exporter is not eligible for a
rebate under the RoDTEP scheme as the goods
had not originated in India. The estimated inel-
igible export incentive involved is ₹1.20 crore.

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