Circular No. 19/2004-Cus.
26th February, 2004 .
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Sub : Misuse/abuse of DEPB Scheme by M/s. S.S. Watch Industries, Jaipur and others – reg.
CC, ACC(Exports), New Delhi has reported a novel modus operandi about misuse of DEPB Scheme against a group of companies viz. M/s. S.S. Watch Industries, Jaipur, M/s. Rama Watch Industries, Rajkot, M/s. Hanu Exports (India), Jaipur and M/s. G.S. Enterprise, Nagaur (Rajasthan). These firms adopted a modus operandi of re-cycling of India made watches of ROMANO/SITAX brand under DEPB Scheme so as to avail illegal benefit. These watches were manufactured by M/s. Rama Watch Industries, Rajkot and its market price was Rs.50/- apprx. The aforesaid firm exported these watches to Dubai based firm at a highly overvalued price approximately of Rs.375/- from Air Cargo, Jaipur/ Ahmedabad. Later on, these watches were imported at Air Cargo, New Delhi and Mumbai at unit price of Rs.50/- declaring the goods of Chinese/Hongkong origin. The same watches were recycled a number of times. Investigations conducted till now have revealed that the above parties exported approximately 5,60,000 watches by adopting this modus-operandi out of which there is evidence of 65,000 watches at Air Cargo, Mumbai and Delhi. The above firms used to avail illegally DEPB benefit @ 17% at the time of export of such watches. Evidences collected so far by CC, ACC (Exports), New Delhi indicate involvement of foreign exchange to the tune of Rs.5 crores and DEPB benefit of more than Rs.1 crore. It is also suspected that export remittances were being financed through Hawala/expatriate funds/crime money. Further investigations are in progress.
2. The aforesaid modus operandi may be brought to the notice of customs field officers under your charge to prevent its recurrence.
3. Receipt of this Circular may kindly be acknowledged.
Officer on Special Duty (DBK)