The Officers of Central Excise, Delhi-I have unearthed a huge evasion of central excise duty running into Rs.21.31 Crores by M/s M.R. Tobacco Pvt. Ltd., engaged in the manufacture of Gutkha. The party was defrauding the revenue department by clandestine manufacture of goods out of the unaccounted raw material procured without payment of duty. Since Gutkha is a sensitive commodity attracting high rate of duty @67.98%, Central Board of Excise and Customs had issued directive to the Gutkha manufacturers on 9.7.2007 to declare number of pouch packing machines, number of shifts and speed of pouch packing machines etc. The party had also mis-declared the number of shifts and speed of pouch packing machines with the malafide intention of concealing its earlier as well as ongoing clandestine manufacture and clearance of goods without payment of duty. The Director of the Company was arrested by the Central Excise Officers on 6th November, 2007 and produced before the Hon'ble Additional Chief Metropolitan Magistrate who has remanded the accused to judicial custody for 14 days. Further investigations in the case are in progress.

This is the second major case of detection of Central Excise duty evasion booked against a Gutkha manufacturer in Delhi Central Excise Zone, which has jurisdiction over Delhi and Haryana.

Central Excise duty evasion exposes clandestine manufacture and mis-declaration leading to arrest and ongoing investigation. Large-scale Central Excise duty evasion was detected at a Gutkha manufacturing unit where clandestine production from unaccounted raw material enabled clearance of excisable goods without payment of duty; the operator mis-declared pouch-packing machine shifts and speeds contrary to a regulatory directive, leading to arrest of the company director, remand to judicial custody, and ongoing criminal and revenue investigations.