Popcorn maize worth more than Rs120 crore was smuggled into the country in the last eight years and duty amounting to Rs60 crore evaded, the Directorate of Revenue Intelligence (DRI) has found out.
Last week, the DRI recovered duty amounting to Rs6 crore from fraudulent importers. In the weeks before that, the DRI had conducted raids on 13 importers and recovered duty of Rs12 crore on import of Rs24 crore worth of popcorn maize.
Popcorn maize is mostly imported from Argentina and the United States of America.
During investigations, the DRI learnt that more than 39,000 tonnes of popcorn maize has been imported since 2003. No duty was paid on these consignments.
The import duty on maize is 50% but according to the tariff rate quota scheme of the directorate general of foreign trade, the duty was brought down to nil in 2002 for those importing maize under the “actual users condition” system. This system is applicable to importers who manufacture the maize for end use and distribute it.
Manufacturers of poultry and animal feed are also allowed to import maize under the actual users condition system.
In many cases, the DRI found that the importers had fraudulently declared themselves as “actual users” to get 100% duty benefit. It had also found that some of the importers did not even have maize or popcorn manufacturing units or machines.
The DRI’s investigations have revealed that maize worth Rs15 crore was imported in the last six months without payment of duty. The DRI won’t be able to recover the duty evaded in last eight years because action in these cases is time-barred. The rules say the DRI can only go back five years to investigate an import fraud and recover duty evaded.
“If the duty evasion is unintentional and because of a procedural lapse, then we go back only six months. But if it is intentional and involves suppression of facts and manipulation, then we can recover duty for the last five years,” a senior DRI officer said, requesting anonymity because he is not authorised to speak to the media.
The DRI is now gathering evidence to establish fraudulent import in the last five years, on which the duty will be recovered. Preliminary investigations have shown that this sum is approximately Rs40 crore, of which Rs18 crore has been recovered.
The fraudulent import is also causing losses to local farmers. According to market sources, Indian popcorn maize costs around Rs30 a kg whereas the imported one (without duty) approximately costs Rs25.