The Central Bureau of Investigation has conducted searches at 19 locations in a case against unknown Central Excise and Customs officials and others for allowing the smuggling of substandard betel/areca nuts of Indonesian origin, leading to Customs Duty evasion of about ₹15,000 crore annually.
The searches were carried out in Nagpur, Mumbai and Ahmedabad, on the premises of private persons, including proprietors or partners of importing firms and customs house agents.
The agency had registered the case in March following a Bombay High Court directive on a public interest litigation alleging that substandard, unsafe and unfit betel/areca nuts of Indonesian origin were being smuggled in by unscrupulous traders in conspiracy with the Customs officials.
Forged certificates of origin, undervalued invoices and fake clearance certificates were used by them to falsely claim that the betel/areca nuts had originated from member countries.
The accused were also taking advantage of huge Customs Duty concessions under the SAARC Preferential Trading Arrangement (SAPTA) and South Asian Free Trade Area (SAFTA) agreements. The rebates are given to promote mutual trade and economic cooperation among the member countries.
Accordingly, the Customs Duty applicable on import of betel nut originating from the member countries is just 13%, as against 113% levied in case of import from non-member countries.
It was alleged that illegal import of Indonesian betel nuts was purportedly facilitated by fake entities registered in India, Indonesia and SAARC countries. Rotten betel nuts were also imported under the guise of cashew peels (combustible material) to evade lab test.
The First Information Report mentioned that in June 2016, 23 wagons of substandard and hazardous betel nuts were intercepted at the Itwari railway station in Nagpur.
“Contrary to the laid down provisions, the public servants concerned — in connivance with the traders — did not look into the matter earnestly and extended them undue favour, causing loss to the government exchequer,” it said.
In 2017, the Directorate of Revenue Intelligence had also detected four cases wherein betel nut consignments smuggled in allegedly via Indo-Myanmar border were found in Nagpur and nearby Gondia. In one case, 106.11 metric tonne was seized and 109.273 metric tonne in another, while two other cases involved 81.42 metric tonne and 40 metric tonne.
