DRI busts ₹30 cr Customs duty evasion of luxury furniture, arrests three

There was a gross undervaluation of between 70% and 90% of the actual transaction value of furniture imported from Europe

MUMBAI: The Mumbai unit of the Directorate of Revenue Intelligence (DRI) has detected a Customs fraud worth ₹30 crores, allegedly involving the import of luxury furniture from Europe, through misdeclaration and undervaluation. The DRI has arrested three accused persons this week for their alleged involvement in the case, according to agency officials.

DRI busts ₹30 cr Customs duty evasion of luxury furniture, arrests three

Acting on specific intelligence, the DRI teams undertook extensive searches this week across multiple locations in the state, including business premises, warehouses, offices of freight forwarders, customs brokers, and other associated entities, agency officials said. The probe revealed the operation of a well-organised network being used for alleged large-scale undervaluation and misdeclaration of branded luxury furniture across several jurisdictions using dummy importers, local intermediaries, and overseas shell entities through fabricated invoices and related documentation to undervalue branded luxury furniture, the officials said.

The key accused was arrested on Monday. Officials said he owned a luxury furniture store which directly sourced the furniture from Italian and European brands for sale. However, the invoicing was done in the name of shell companies based in Dubai and the United Arab Emirates. The probe also revealed the use of a Singapore-based intermediary that allegedly falsely declared the goods as non-branded furniture at undervalued rates before Indian Customs authorities for clearance in the name of dummy importers.

Once cleared through Customs, the goods were transferred on paper to the key accused via a local intermediary created for the purpose. “In reality, the goods were directly sent to the beneficial owner or the customer,” the official said.

There was a gross undervaluation of between 70% and 90% of the actual transaction value, resulting in an estimated Customs duty evasion of around ₹30 crore, officials said. Apart from the key accused, the DRI also nabbed a dummy importer and an intermediary on Monday and Tuesday under relevant provisions of the Customs Act, the officials said.

Two months ago, in a similar but separate case, the DRI detected undervaluation of luxury furniture imports through a bogus company. The case involved Customs duty evasion of ₹20 crore and led to the arrests of three accused persons involved in the case.

“The DRI has stepped up its efforts in exposing such commercial frauds, which not only result in significant losses to government revenue but also create market distortions and an uneven playing field for compliant importers and domestic manufacturers,” an official said.