Amritsar, May 1
A sensational case of evasion of customs duty amounting to more than Rs 15 crore by a Ludhiana-based 100 per cent export-oriented unit (EOU) financed by the Industrial Development Bank of India (IDB) and the Punjab State Industrial Development Corporation (PSIDC) has been detected during a raid conducted by a high-level team on a specific tip-off.

The firm adopted a novel method to evade customs duty by exploiting the loopholes of the liberalised Exim policy (export-import) during the past four years.

The Additional Commissioner of Customs, Mr P.S. Pruthi, while addressing mediapersons here today said Harbhajan Singh Sandhu and his wife Kanwaljit Kaur, Directors of the Royal Industries Ltd and partners in the Punjab Exports, who were the kingpins in the multi-crore duty evasion scam had absconded even as the Punjab and Haryana High Court had stayed their interim bail order passed by the Sessions Court of Ludhiana. The department had alerted all international airports so that they did not escape from the country.

Giving details of the modus operandi, Mr Pruthi said Harbhajan Singh Managing Director of the Royal Industries, took full advantage of the liberalised export policy and imposed polyester yarn, acrylic fibre, acrylic tops, acrylic tow, woollen yarn, synthetic fibre, dyes and chemicals for his 100 per cent EOU under the free duty scheme to manufacture fabrics and blankets for its total export. The customs official who had been keeping close watch on the unit after receiving reports that Sandhu was diverting raw material imported under the scheme to the open market thus flouting the rules under the Exim policy.

Mr Pruthi said department officers sealed his two units and raided his residential premises to recover a large number of incriminating documents, including fictitious bills and challan books of various non-existent firms based at Amritsar and Ludhiana. He disclosed that the department managed to get confessional statement from a senior employee of the company, Mr Sushil Kumar, who gave complete details of the material being siphoned off clandestinely to the open market as the same was not used to manufacture blankets and other fabric for export under the 100 per cent EOU free-import duty scheme.

Mr Sushil Kumar said a large quantity of unprocessed polyster fabrics was sold to various companies and firms throughout India believed to be fictitious or existing firms according to documents recovered from the premises of the factory. On verification, a factory based at Rajkot (Gujarat) claimed that it had never received any material either for job work or for export from the Royal Industries, while another firm in Medak (South India), M/s Ahmed Garments, was found to be not working for the past two years. It was alleged that Rs 50 crore worth of raw material imported under the scheme had been sold in the open market.

Customs officers had been keeping a watch on this unit since March 27 but Harbhajan Singh and his wife managed to escape by procuring anticipatory bail from the district Sessions court which was later stayed by the Punjab and Haryana High Court.

Mr Pruthi revealed that Mr Sandhu had been taking to send the material for job work to non-existent firms like Narang Enterprises and Gopal Woollen Fabrics in Ludhiana while some material to some existing firms namely G.R. Fabrics and Navbharat Specially Fabrics. The proprietors of the firms said they had never received any raw material from the Royal Industries.