DRI Customs Duty Evasion What Happened?
The Directorate of Revenue Intelligence (DRI) recently arrested a 31-year-old trader from Mumbai for evading customs duty worth ₹42 crore. The trader allegedly under-declared the value of 3,630 metric tonnes of inshell walnuts imported from Chile.
This major seizure highlights how undervaluation and false declarations can trigger severe penalties under the Customs Act, 1962.
Key Facts of the Case
- Commodity: Inshell walnuts
- Country of Origin: Chile
- Quantity: 3,630 metric tonnes
- Evasion Amount: ₹42 crore
- Action Taken: Arrest under Section 104 of the Customs Act
Reference: DRI official press release.
How Does Customs Duty Evasion Happen?
Some common methods used by unscrupulous importers include:
✅ Undervaluing goods in invoices.
✅ Misdeclaring the product to attract lower duty.
✅ Using shell companies to hide the real importer.
✅ Diverting bonded goods for local sale without paying duty.
These acts violate Sections 111 & 112 of the Customs Act and can lead to prosecution.
Legal Penalties for Customs Duty Evasion
Importers caught evading duty may face:
- Confiscation of goods under Section 111.
- Penalties up to 5 times the duty evaded under Section 112.
- Arrest and prosecution under Section 104.
- Prosecution under the Prevention of Money Laundering Act (PMLA) if proceeds are laundered.
Case Law Reference: Union of India vs Rajesh Kumar Chawla (2019) – Supreme Court upheld strict action for intentional undervaluation.
Expert Tip: How to Avoid Compliance Risks
✅ Always declare true transaction value.
✅ Keep supporting documents like contracts, invoices, and shipping bills ready.
✅ Use a certified customs broker for filing Bill of Entry.
✅ Stay updated with CBIC notifications on customs tariff changes.
✅ Consult a tax expert for HS code classification to avoid misdeclaration.
Frequently Asked Questions (FAQs)
Q1: Is undervaluing goods a criminal offence?
Yes. Intentional undervaluation can lead to arrest, seizure, and imprisonment under the Customs Act.
Q2: What is the penalty for customs duty evasion in India?
Up to 5 times the duty evaded plus prosecution.
Q3: How can importers stay compliant?
Declare actual transaction value, maintain clear records, and follow CBIC rules.
Closing Note
Cases like the DRI Customs Duty Evasion crackdown serve as a warning for importers and businesses to stay compliant. Need help with import-export compliance? Consult Efiletax’s experts for reliable customs and tax filing services.
Summary
The DRI arrested a trader for ₹42 crore customs duty evasion in inshell walnut imports from Chile. Importers must avoid undervaluation and misdeclaration to stay compliant under the Customs Act, 1962. Efiletax offers expert help for hassle-free customs compliance.