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Rs24-cr popcorn maize import racket busted

The popcorn you eat while watching a movie in theatres and multiplexes could be made from maize that is being fraudulently imported in India.

mumbai Updated: Dec 26, 2010 01:41 IST
Manish Pachouly
Manish Pachouly
Hindustan Times

The popcorn you eat while watching a movie in theatres and multiplexes could be made from maize that is being fraudulently imported in India.

For the last two weeks, the Directorate of Revenue Intelligence (DRI), Mumbai, has been conducting raids on importers who are bringing in popcorn maize by fraudulently declaring themselves as “actual users” to get 100% duty benefit.

Till date, the DRI has recovered around Rs 12 crore as duty for fraudulent import of around Rs 24 crore worth popcorn maize — mostly from Argentina and the US.

Though no arrests have been made yet, the agency is investigating the role of 13 import companies, revealed a senor DRI officer, requesting anonymity because he is not authorised to speak to the media.

Though the companies are based in Mumbai, Nagpur, Jalgaon, Indore, Hyderabad, Chennai and New Delhi, the import is done from Nhava Sheva port near the city.

Additional director general of DRI, Mumbai, TK Govil refused to comment.

As per the import policy, the import of maize is restricted in India. The actual users, who manufacture the maize for end use and distribute the same by themselves, could only import it at no duty.

The manufacturers of poultry and animal feed are also allowed to import maize under the actual users condition.

The duty on maize is actually 50% but as per the tariff rate quota scheme of the Directorate General of Foreign Trade, the duty has been done away with since 2002.

Under the Foreign Trade Policy, the importers, who are actual users, have to import the maize through government agencies such as the National Agricultural Cooperative Marketing Federation of India Limited and State Trading Corporation of India Limited.

During investigation, the officials found that the 13 importers had fraudulently declared themselves as actual users to import popcorn maize duty free. Some of them even did not have maize or popcorn manufacturing units or machines.

The DRI began investigation following complaints from the Popcorn Maize Growers and Traders Association, which is located at Chikballapur in Karnataka.

Venu Akula, secretary of the association, said because of the duty free import, which is done fraudulently by some importers, local farmers are suffering. “Since it is imported duty free, it costs less than the popcorn maize grown locally,” said Akula.

He added that because of rise in production costs, Indian maize costs more than the imported one.

Market sources said that as against the price of Rs 30 per kg for Indian popcorn maize, the imported one (without duty) costs around Rs 25 a kg. The Indian market has demand of around 50,000 metric tonne of popcorn maize per annum.

Akula pointed out that though the racket has been on since 2002-03, it has increased since 2006. “The rapid growth of malls and multiplexes has further attracted fraudulent import as demand for popcorn maize has increased tremendously,” he said.

He added that the licencing authorities should scrutinise the importers to find out the actual users are.

First Published: Dec 26, 2010 01:40 IST