Cash seized Rs. 177 cr in Kanpur Search by DGGI Ahmedabad; Piyush Jain arrested

DGGI Ahmedabad has seized more than Rs 177 crore in Kanpur search operations. Search operations at Kannauj premises continue with recovery of Rs 17 crore, 64 kg gold and 600 kg sandalwood oil worth Rs 6 crore.

Directorate General of GST Intelligence (DGGI), Ahmedabad has carried out search operations on 22/12/2021 in Kanpur/ Kannauj at factory premises of Shikhar brand Pan Masala/ Tobacco products, office/ Godowns of Ganpati Road Carriers and the residential/ factory premises of M/s Odochem Industries, suppliers of perfumery compounds.

DGI Ahmedabad had intercepted 4 trucks operated by M/s Ganpati Road Carriers, carrying Shikhar pan masala and tobacco cleared without payment of GST, using fake invoices. During further investigation, 200 such fake invoices were seized, which revealed that the manufacturer was indulging in illegal removal of goods, without issuance of requisite e-way bills, with the help from transporter who used to manage the transportation of said goods by using fake invoices.

The search operation at the residential premises of the partners of M/s Odochem Industries at Kanpur have been completed with total recover/ seizure of unaccounted cash of Rs. 177.45 crore, the biggest ever figure of cash seizure by CBIC officials. Further, search operations at Kannauj premises is in progress, where the DGGI Ahmedabad officials have  so far been able to recover Rs 17 crore in cash, 23 kg of gold and huge unaccounted raw materials used in manufacture of perfumery compounds, including more than 600 kg of sandalwood oil hidden in an underground storage, having a market value of about Rs 6 crore. The gold so recovered is having foreign markings and hence the matter has been referred to Directorate of Revenue Intelligence (DRI) for necessary further investigations.

Based on the evidence collected during search, Shri Peeyush Jain, Partner of M/s Odochem Industries, Kannauj was interrogated by the Officials of DGGI Ahmedabad. He has accepted that the cash recovered from his residential premises is related with sale of goods without payment of GST. In view of substantial evidence available on record indicating large scale evasion of GST Shri Peeyush Jain, Partner of M/s Odochem Industries, Kannauj has been arrested for commission of offences u/s 132 of the CGST Act, 2017.

Based on specific intelligence inputs, the Officials of DGGI, Ahmedabad with the support of local CGST Officials initiated the search operations in Kanpur on 22/12/2021. The search operations covered the factory premises of M/s Trimurti Fragrance Pvt Ltd, Kanpur, manufacturers of Shikhar brand Pan Masala and Tobacco products and the office/ godowns of M/s Ganpati Road Carriers, Transport Nagar, Kanpur, involved in transportation of goods.

The information indicated clandestine supply of goods by the manufacturer without payment of applicable tax. The transporter reportedly used to generate multiple invoices in the name of non-existent firms, all below Rs 50,000/- for one full truck load, to avoid generation of E-way Bills while moving the goods. The transporter was also collecting the sale proceeds of such clandestine supply in cash and handing it over to the manufacturer, after deducting his commission.

In the premises of the transporter, M/s Ganpati Road Carriers, more than 200 fake invoices used in the past for transportation of goods without payment of GST have been recovered. The transporter has also admitted that goods were being transported without e-way bills under the cover of fake invoices and also the sale proceeds was being collected in cash, to be handed over to the manufacturer. An amount of Rs 1.01 crores in cash has been seized from the possession of transporter.

On 30/12/2021, the DGGI has refuted the speculative and baseless news reports stating that ‘the DGGI has decided to treat the cash recovered as the turnover of the manufacturing unit and proposes to proceed accordingly’. Further, some news reports have even gone to the extent of admission of liability by the defaulter party and deposit of Rs. 52 crore as tax with the approval of DGGI. However, as per DGGI, any/ all voluntary submissions made by the defaulter party are a subject matter of ongoing investigations and any view on the source of cash seized by the department and the exact tax liability shall be determined based on appraisal of evidences collected from various premises during the searches and the outcome of further investigations.

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