Page 155 - SMUGGLING IN INDIA REPORT FOR 2020-2021

CHAPTER 8: COMMERCIAL FRAUDS-IMPORTS 109
Misclassification of goods to avail End use notification benefits
Several importers engaged in the import of Optical Ground Wire (OPGW) for supply to power transmission companies, were evading Customs duty by way of wrongly availing the benefit of concessional rate of duty of Notification No. 24/2005-Cus, dated 01.03.2005. They were engaged in deliberate mis-declaration and mis-classification of the imported OPGW (Optical Ground Wire).
In another case, importers were found to be involved in import of ETP copper wire rods at concessional rate of duty under notification 25/1999-Customs, dated 28.02.1999, for use in manufacture of lead wires of electronics parts. However, investigation revealed that they didn’t have requisite manufacturing facility.
Undervaluation by suppressing certain component of ‘cost & services’
In one of the case investigated by DRI, a leading cosmetic producer in India was found to be evading duty on imports by not disclosing the payment of royalty towards distribution license fees and manufacturing, to their overseas suppliers.
3. Undervaluation and Overvaluation:
Undervaluation of imported goods has been a perennial problem and such economic offences are being observed regularly. Establishing undervaluation by importers is a complex task, because tracking the money flowing through informal channels/ hawala is never easy. Thus, redetermination of value on the higher side also becomes difficult.