Sleuths Raid 80 Firms Across Several States
The Directorate of Revenue Intelligence (DRI) has unearthed a scam worth Rs 29000 crore by coal importing companies in the period of 2011-2014, which were siphoning money abroad. The companies, who imported coal from Indonesia for their power plants, inflated the value of coal imports, and parked the overrated component in tax havens. DRI has raided over 80 shipping companies, intermediaries and laboratories across the country including, Maharashtra, Delhi, Gujarat, Karnataka, Andhra Pradesh, Odisha, West Bengal and Kerala in search of documents that show the real value of the imports. Almost all laboratories testing coal in India have been searched by the DRI to obtain the lab reports for verification of the calorific value of the imported coal.
The overvaluation also has an impact on the tariffs paid by consumers here as power companies could have a higher tariff fixation based on the inflated rates. DRI is also investigating some of the public sector companies that have indulged in overvaluation. The overvaluation of the imported coal has a direct effect on the tariff fixation. In other words, the power tariff would be less – possibly Re 1 per unit – if the value of imported coal value was not inflated.
An official said that almost every importer, including the reputed corporates, have indulged in overvaluation of coal imports. DRI is learnt to have recovered documents showing the real value of the imports. Indian companies including public sector ones imported 77 million tonnes of coal from Indonesia, in the financial year 2012-13.
Industry sources estimate that around 12 crore MT of coal has been imported from Indonesia in the year 2012-14. The sources added that the imported coal from Indonesia is overvalued to the extent of at least two times the actual value declared in the country of origin.
The modus operandi adopted by the companies is that while coal imports would directly be shipped from Indonesia, the invoices will be routed through an intermediary based either in Hong Kong, Singapore or Dubai. “The inflated amount will be sent to the intermediary who, in turn, would remit the actual value to the Indonesian supplier. The overvalued component would be diverted to tax havens,” the source said. The intermediary is either related to the importer or handles such operations on commission basis, sources said.
DRI has found that the companies did not avail of the Preferential Trade Agreement that extended concessional duties for imports from Indonesia. Steam coal imported from Indonesia attracts zero rate of duty and the companies are required to produce country of origin certificate issued by the supplier. “The companies did not avail of this facility because in such a scenario, the companies would have to produce the certificate which would carry the real value,” the source added.
CBI files new FIR in coal sacm
The CBI has filed a new case against two private companies and unknown government officials in its ongoing probe in the coal block allocation scam and conducted searches at five places in West Bengal and Jharkhand. The coal block in question in Jharkhand was allocated in July 2005 when Arjun Munda was the chief minister of the state.
The agency registered the case against Electrosteel Castings Ltd, Electrosteel Steels Ltd and some unknown public servants under sections of cheating, criminal conspiracy and Prevention of Corruption Act in its probe related to Parbatpur coal block - situated in the Jhariya coalfield in Jharkhand.
The said case is the outcome of a PE registered earlier by CBI to look into the allocation of coal blocks during the period 1993 to 2005.
It was alleged that ‘Parbatpur’ coal block was allocated to a private Company based at Sundergarh (Odisha) for their proposed Pig Iron plants at Khardah (West Bengal) & Kalahasti ( Andhra Pradesh) and middlings generated in washery for captive consumption in the proposed power plant. It is further alleged that the said Sundergarh (Odisha) based company acquired about 48.5% shares of a Andhra Pradesh based private company and allocation was made for a plant of an Andhra Pradesh based company, whereas the Andhra Pradesh based private company never independently applied for a coal block. The company resorted to sale of 50162.42 Metric Tonnes of middlings dishonestly to another private company based at Jharkhand and the company disposed 42500 Metric Tonnes of inferior ungraded coal, jhama and slurry to the non-approved end users. CBI teams conducted searches at 5 locations including Bokaro, Ranchi and Kolkata.
Parbatpur is among the 29 blocks being reviewed by an inter-ministerial group from the Comptroller and Auditor General’s (CAG) list of 57, which allegedly translated into a loss of Rs. 1.86 lakh crore to the national exchequer. This block has an estimated reserve of 231 million tonnes.
The Directorate of Revenue Intelligence (DRI) has unearthed a scam worth Rs 29000 crore by coal importing companies in the period of 2011-2014, which were siphoning money abroad. The companies, who imported coal from Indonesia for their power plants, inflated the value of coal imports, and parked the overrated component in tax havens. DRI has raided over 80 shipping companies, intermediaries and laboratories across the country including, Maharashtra, Delhi, Gujarat, Karnataka, Andhra Pradesh, Odisha, West Bengal and Kerala in search of documents that show the real value of the imports. Almost all laboratories testing coal in India have been searched by the DRI to obtain the lab reports for verification of the calorific value of the imported coal.
The overvaluation also has an impact on the tariffs paid by consumers here as power companies could have a higher tariff fixation based on the inflated rates. DRI is also investigating some of the public sector companies that have indulged in overvaluation. The overvaluation of the imported coal has a direct effect on the tariff fixation. In other words, the power tariff would be less – possibly Re 1 per unit – if the value of imported coal value was not inflated.
An official said that almost every importer, including the reputed corporates, have indulged in overvaluation of coal imports. DRI is learnt to have recovered documents showing the real value of the imports. Indian companies including public sector ones imported 77 million tonnes of coal from Indonesia, in the financial year 2012-13.
Industry sources estimate that around 12 crore MT of coal has been imported from Indonesia in the year 2012-14. The sources added that the imported coal from Indonesia is overvalued to the extent of at least two times the actual value declared in the country of origin.
The modus operandi adopted by the companies is that while coal imports would directly be shipped from Indonesia, the invoices will be routed through an intermediary based either in Hong Kong, Singapore or Dubai. “The inflated amount will be sent to the intermediary who, in turn, would remit the actual value to the Indonesian supplier. The overvalued component would be diverted to tax havens,” the source said. The intermediary is either related to the importer or handles such operations on commission basis, sources said.
DRI has found that the companies did not avail of the Preferential Trade Agreement that extended concessional duties for imports from Indonesia. Steam coal imported from Indonesia attracts zero rate of duty and the companies are required to produce country of origin certificate issued by the supplier. “The companies did not avail of this facility because in such a scenario, the companies would have to produce the certificate which would carry the real value,” the source added.
CBI files new FIR in coal sacm
The CBI has filed a new case against two private companies and unknown government officials in its ongoing probe in the coal block allocation scam and conducted searches at five places in West Bengal and Jharkhand. The coal block in question in Jharkhand was allocated in July 2005 when Arjun Munda was the chief minister of the state.
The agency registered the case against Electrosteel Castings Ltd, Electrosteel Steels Ltd and some unknown public servants under sections of cheating, criminal conspiracy and Prevention of Corruption Act in its probe related to Parbatpur coal block - situated in the Jhariya coalfield in Jharkhand.
The said case is the outcome of a PE registered earlier by CBI to look into the allocation of coal blocks during the period 1993 to 2005.
It was alleged that ‘Parbatpur’ coal block was allocated to a private Company based at Sundergarh (Odisha) for their proposed Pig Iron plants at Khardah (West Bengal) & Kalahasti ( Andhra Pradesh) and middlings generated in washery for captive consumption in the proposed power plant. It is further alleged that the said Sundergarh (Odisha) based company acquired about 48.5% shares of a Andhra Pradesh based private company and allocation was made for a plant of an Andhra Pradesh based company, whereas the Andhra Pradesh based private company never independently applied for a coal block. The company resorted to sale of 50162.42 Metric Tonnes of middlings dishonestly to another private company based at Jharkhand and the company disposed 42500 Metric Tonnes of inferior ungraded coal, jhama and slurry to the non-approved end users. CBI teams conducted searches at 5 locations including Bokaro, Ranchi and Kolkata.
Parbatpur is among the 29 blocks being reviewed by an inter-ministerial group from the Comptroller and Auditor General’s (CAG) list of 57, which allegedly translated into a loss of Rs. 1.86 lakh crore to the national exchequer. This block has an estimated reserve of 231 million tonnes.
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