In one of the largest cases of central excise evasion detected in the recent past, the Central Excise Commissionerate, Rohtak, Delhi zone has registered a case of evasion of duty by M/s Som Sugandh Industries Ltd., Kundli, the manufacturer of popular brands of Gutkha namely Dilbagh, Talab and Tez. Acting on intelligence, the unit was kept under surveillance for a few days. Thereafter, a team of officers of Rohtak Commissionerate searched the factory premises and the residence of the Manager on 20th and 21st October. The searches revealed an evasion of central excise duty of Rs.15.15 crores, payable on account of production of only 19 days for the month of October, 2007. The modus operandi adopted by the party was that while they had declared to the Department only one shift, the factory, however, worked round the clock. The duplicate set of challans of such unaccounted production and clearances was kept in the personal custody of their Manager at his residence. This is the second case of evasion booked against this unit. The earlier case was detected in May, 2007, involving duty evasion of Rs. 9.64 lakh.

This case is symptomatic of the large scale evasion taking place in the Pan Masala, Gutkha and chewing tobacco sector all over the country. The revenue from these commodities is far short of the estimated revenue that should be coming based on various parameters such as number of packing and filling machines, commodity manufactured and sold, estimates of consumption of raw materials such as Supari etc. The revenue from this sector has not been enjoying the growth which is expected, based on the growing consumption of these products amongst masses.

The Chairman, Central Board of Excise and Customs had recently issued instructions to tackle the rampant evasion that is characteristic of this sector. Instructions have been issued to the field formations to verify the machines present in the factory, the number of such machines working, and for sealing of non-working machines. In the light of the detection of this case, the Chairman, has once again reiterated to all the Central Excise officials all over the country to gear up their anti-evasion activities and realize the revenue, the potential of which is very high going on the basis of this case which has unearthed evasion of over Rs.15 crores in a matter of 19 days only.

Excise duty evasion detected: undisclosed continuous production revealed, prompting intensified anti-evasion enforcement and machinery verification nationwide. Detection disclosed excise duty evasion by a Gutkha manufacturer who declared only one shift while operating round the clock; searches recovered duplicate challans and unaccounted clearances kept at the manager's residence, evidencing undisclosed production. Authorities directed verification of machinery, sealing of non-working machines, and intensified anti-evasion inspections in the sector.