Mumbai: Even as a political slugfest over the Rs 12,000 crore PNB fraud continues and CBI makes more arrests, the Directorate of Revenue Intelligence (DRI) has proposed to move against fugitive diamantaire Nirav Modi and his three companies for deception, falsification of records and misdeclaration of imported diamonds and pearls.
If the trial finds him guilty, Modi can face imprisonment of up to seven years, and/or fine.
While talking about the nature of the charges against Nirav Modi, a DRI official told CNN-News18, "There are several grave charges against him such as misdeclaration of value and quantity of the imported cut and polished diamonds to customs department; clandestinely diverting the duty exempted cut and polished diamonds to the domestic tariff area.”
“Also, falsification of documentation and submission of such documents to the customs department; violation of the rules of “authorised operations” of SEZ; and causing loss of customs duty to the government by their acts.”
The case dates back to 2014 when the DRI observed deceptive records of Nirav Modi and his firms. The agency issued two notices to him while Modi paid a fine of Rs 48 crore in 2016.
The DRI has named Ms Firestar Diamond International, Ms Firestar International Pvt Limited and Ms Radhashir Jewellery Company Limited in its case against the billionaire jeweller.
NIRAV’S MODUS OPERANDI
When asked about Modi’s modus operandi in evading the customs, a DRI official elaborated, "We had a tip off that Nirav Modi was overvaluing his diamond-studded jewellery. So, we investigated the matter and intercepted his export consignment of diamond-studded jewellery on December 5, 2014. A total of eight consignments were intercepted at the Air Complex Cargo of Sahar. One was headed for the USA, one for Canada, three for Hong Kong and three for Dubai."
"When we examined them, we found that except the consignments for USA and Canada, all others were grossly mis-declared in quantity and value."
Asked about the nature of over-valuation, the officer said, "Freight on Board (FOB) or the export value of cut and polished diamonds for the six consignments was declared as Rs 43.10 crores, whereas the value ascertained by the government-approved valuer was merely Rs 4.93 crore."
"On detailed investigation, it was revealed that units located in the SEZ Surat, namely M/s Firestar Diamond International Pvt. Ltd.(FDIPL), M/s Firestar International Pvt. Ltd. (FIPL) and M/s Radhashir Jewellery Company P.Ltd. (RJCPL) were diverting the imported duty exempted cut, polished diamonds and pearls from the SEZ to the Domestic Tariff Area (DTA) unscrupulously and substituting them with the low quality cut polished diamonds and pearls procured from the DTA, thereby causing loss of customs duty to the exchequer. During the course of the investigation, the declared value of the diamonds was Rs 1,112.3 crores while only Rs 74.63 crores worth diamonds were seized from Surat," the officer said further.
The DRI then issued two show cause notices to Nirav Modi's companies. These notices demanded duty, interest and penalty for the confiscated goods. Thereafter, the three companies paid Rs 48.22 crore.
An official statement by the DRI said, "Shri Nirav Modi, Ms Firestar Diamond International, Ms Firestar International Pvt Limited, and Ms Radhashir Jewellery Company Limited have been found to be fit to be prosecuted under Sections 132, 135(1)(a), 135(1)(b), 135(1)(i) of Customs Act, 1962 and Section 120-B of IPC, 1860. If convicted, the quantum of punishment as per Section 135(i)(D) of the Customs Act, 1962 is upto 7 years imprisonment. The draft complaint along with all relied upon documents have been forwarded to the jurisdictional Commissionerate in Surat for filing in the appropriate court of law. Trial is expected to be launched shortly."
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