Directorate General of Central Excise Intelligence (DGCEI),, New Delhi recently booked cases against M/s Progressive Alloys India Pvt Ltd, Delhi, a registered dealer and copper wire manufacturers M/s Malhotra Cable Pvt Ltd, Delhi and M/s Kopertek Metals Pvt Ltd, Bhiwadi for tax evasion of over Rs 25 crore by misusing Cenvat Credit facilities.

During search operations carried-out at various related premises of one Mr Amit Gupta, Director of M/s Progressive Alloys India Pvt Ltd, Delhi, factory premises of M/s Malhotra Cable Pvt Ltd, situated at Delhi and Manesar- Gurgaon and M/s Kopertek Metals Pvt Ltd, Bhiwadi, officers of DGCEI detained unaccounted Copper Scrap valued at Rs 1.7 crore found in an undeclared godown of M/s Malhotra Cables Pvt Ltd and M/s Kopertek Metals Pvt Ltd. The officers also seized cash of Rs 1.05 crore from the secret office and secret godown of Mr. Amit Gupta.

Various documents recovered during the search revealed the modus operandi of fake invoices adopted by Mr Amit Gupta. He was operating/running five companies (Central Excise Registered Dealers) and procuring the materials (Metals like Copper, Zink, Tin, Nickel etc) under the Central Excise duty paid invoices from domestic market and under the Custom Duty paying documents i.e. Bill of Entry on import of metals. He sold the said materials in the market in cash without any bill. Central Excise/ Countervailing duty paid on the goods was passed on as Cenvat Credit to manufacturers such as M/s Malhotra Cables and Kopertek Metals and others who received the invoices issued by the dealers without supply of goods.

DSM/RS/ka

(Release ID :92399)

Misuse of Cenvat Credit uncovered through fake-invoice network, leading to seizures and tax-evasion prosecutions. Investigations uncovered a scheme abusing Cenvat Credit whereby a single operator ran multiple registered dealers who procured metals on duty-paid invoices or import bills of entry and issued invoices to manufacturers without supplying goods. Searches and raids produced documentary evidence of fake invoices, detention of unaccounted metal stock, and seizure of cash, supporting bookings for tax evasion by passing central excise/countervailing duty as undeserved input credit to manufacturers.