CBI imposes ₹10.2 crore fine on man in customs fraud case

18 years after a case was registered, a special CBI court sentenced a person to 6 years of rigorous imprisonment and fined him ₹10.2 cr for customs duty drawback fraud committed by submitting forged export documents

Eighteen years after a case was registered, a special Central Bureau of Investigation (CBI) court on Monday sentenced a person to six years of rigorous imprisonment and fined him ₹10.2 crore for customs duty drawback fraud committed by submitting forged export documents.

A representational image. (HT archives)

Following the sentencing by special CBI judge S U Wadgaonkar, the main beneficiary of the fraud, identified as Krishna Kumar Gupta, has been sentenced to six years under section 420 of the Indian Penal Code (IPC), and if he doesn’t pay the fine of ₹10.2 crore, he will be sentenced to 18 more months.

The court further sentenced Gupta, aged 62, to two years and imposed on him a fine of ₹10 lakh for conspiracy and using a forged document.

The court sentenced another individual identified as Sudhir Mandal to three years rigorous imprisonment with a fine of ₹3 lakh, and two employees of Bank of India’s Cotton Exchange branch in Fort area - Vasant Parkhe and Sunil Jadhav - to one year each under the Prevention of Corruption Act. They have been fined ₹1 lakh each.

The CBI’s economic offences wing (EOW) had registered a case for cheating, conspiracy, and using as genuine a forged document under the Prevention of Corruption Act in March 2003. The CBI had named 11 companies and two individuals, Gupta and Mandal, along with unnamed customs and Bank of India officials in the complaint.

The CBI had alleged in its complaint that Gupta and Mandal along with customs and bank officials entered into criminal conspiracy, stating that their objective was to cheat the union government by dishonestly claiming customs duty drawback from the customs department by submitting forged export documents.

The accused used 11 fictitious firms to prepare false export documents in their names. By submitting such documents to the customs department, they managed to obtain 26 customs duty drawback cheques worth more than ₹2 crore. The accused submitted 66 shipping bills to the drawback department of Mumbai Customs in order to claim fraudulent duty drawback, the CBI stated.

The agency alleged that no actual exports were made by any of the 11 fictitious firms, and the cheques obtained were deposited in the bank account of a proprietary firm of Mandal on Gupta’s instructions.

The export document submitted to the customs department was forged and duty drawback was claimed in connivance with unnamed customs officials, it had been alleged.

Special public prosecutor Jeetendra Sharma, appearing for the investigating agency, argued that the fraud had been perpetuated starting in 1998.