DRI books Nirav for diverting jewellery

MUMBAI: Disgraced jeweller Nirav Modi found himself in more trouble after the Directorate of Revenue Intelligence (DRI), Mumbai, registered a tax evasion case against him for illegally diverting imported diamonds and pearls worth ₹890 crore into the local market. DRI alleged Modi misused benefits given to firms operating out of India’s Special Economic Zones (SEZS).

It claims two Modi firms — Firestar Diamond International Pvt. Ltd, Firestar International Pvt. Ltd.and others — diverted duty-free goods from SEZS in Surat and Jaipur. The case dates back to December 5, 2014, when DRI intercepted six consignments of diamond jewellery at the city’s international airport, which were on their way to the US, Hong Kong, Dubai and Canada. Officials found discrepancies in the details of the consignments headed for Hong Kong and Dubai.

In units located in SEZS, goods are allowed to be imported duty- free for the purpose of export. SEZS are considered to be outside the tax jurisdiction of the country and domestic sale is allowed only if companies pay Customs duty on the product. “If goods are imported, there should be a value addition and exported. If the companies want domestic clearance, then they have to pay tax and interest,” said the officer.

DRI officials said the probe revealed there was a difference in the declared stock value of diamonds/pearls in SEZ units when compared with the ascertained actual value. “This clearly indicates some stock of these goods has been diverted to a domestic tariff area,” said a DRI officer.

DRI scrutinised the documents available, which revealed goods approximately worth ₹890 crore, which had a Customs duty of approximately ₹52 crore, appear to have been diverted by the SEZ units of the Nirav Modi Group of firms into the domestic market. “It is commercial fraud, but liable to criminal prosecution because of the quantum of the sum,” said the officer, adding that Modi could also face arrest in the case.