DGCEI unearths huge Cenvat fraud
Tax authorities have unearthed a huge racket in Cenvat claims, which has robbed the Govt of several hundred crores of rupees.india Updated: Mar 14, 2006 16:48 IST
Tax authorities have unearthed a huge racket in Cenvat claims by manufacturers, who used fictitious invoices to claim credit on central excise duty payments and in the process robbed the government exchequer of several hundred crores of rupees.
"Ind Swift Group of Companies had taken credit worth crores of rupees on the basis of invoices of fictitious or non existent or non-registered manufacturers and dealers," said the Directorate General of Central Excise Intelligence.
During its nationwide operation on March 8, DGCEI had raided and seized incriminating documents from the office and factory premises of Chandigarh-based Ind Swift and a large number of manufacturers and dealers in Ghaziabad and Noida.
This is only the tip of the iceberg and a large number of dealers and manufacturers are involved in Cenvat misuse in several parts of the country like Faridabad, Naraina (Delhi), Mandi Govindgarh, Vashi (New Mumbai), Hyderabad and Ahmedabad, it said.
"Further investigations are expected to unearth fraudulently availed Cenvat running into several hundred crores of rupees," DGCEI said and warned that it would come down heavily on fraudsters.
According to rules, manufacturers of excisable goods are entitled to take credit of the central excise duty paid on inputs, while paying excise duty on finished products.
Dealers trading in excisable goods, issue invoice showing duty payment in respect of goods traded by them and actual manufacturers are entitled to use these invoices to take credit on the duty paid on inputs purchased from traders.
Investigating agencies suspect large-scale issue of fake invoices resulting in huge loss to the government exchequer.