DRI sleuths bust diesel smuggling racket, 4 held

Vijayawada: The sleuths of Directorate of Revenue Intelligence (DRI) have busted Kakinada-based diesel import smuggling racket and arrested four persons including the mastermind and one hawala operator on Friday.

Working on inputs from Andhra Pradesh police intelligence, the DRI officers at Hyderabad have found that diesel was being smuggled into India in the guise of mineral spirit in large quantities on regular basis by some operators based at Kakinada and Chennai and the fuel brought in from Dubai by containers at Chennai port was moved out for illegal sale in Tamil Nadu, Andhra Pradesh and Telangana, sources said.

They said searches were conducted over the last one week by the DRI sleuths based in Hyderabad and Chennai with support from AP police intelligence at various places across AP and TN, including operators/importers, clearing agents, transport broker, supervisor and hawala operators. Searches at two Container Freight Stations (CFS) at Chennai revealed that 14 containers imported at Chennai port in the name of M/s SAF Petroleum and M/s Aditya Marine landed at Sanco CFS, Chennai and Gateway CFS, Chennai, where the goods were declared as mineral spirit. 

The containers were found to be actually carrying 263.78 MT (3 lakh litres approximately) of diesel. The operators admitted the crime, which was also confirmed through chemical analysis of the fuel. Diesel is a restricted commodity for import as per the Foreign Trade Policy and allowed to be imported only by Indian Oil Corporation (IOC) and other oil marketing companies which meet the requirement of Ministry of Petroleum Resolution No. P-23015/1/2001-Mkt. 

“To circumvent the said restriction, the operators at Kakinada hatched a plan and started smuggling ‘diesel’ in the guise of ‘mineral spirit’. They not only imported the said restricted item but also declared much lower value, around 40 per cent of the actual value, thereby evading customs duty. The operators had offices at Kakinada, a storage yard at Maraimalai Nagar near Chennai and an office front at Guindy in Chennai to handle the smuggling and distribution. A relative of one of the operators from Kakinada was looking after the logistics, moving the diesel into the grey markets in Chennai, Kakinada, Ongole and parts of Telangana,” a DRI official said.

Dummy companies were opened in Dubai to purchase diesel and export the same to Chennai through false documents and invoices. The price difference was being adjusted by payments through hawala channels. It was found that these operators have smuggled around 5366 MT (63 lakh litres approx) of diesel in about 285 containers so far, valued at around 17.7 crores. At the end of the present search operations, DRI officials have seized 14 containers of diesel worth over Rs 1 crore and taken into custody four persons, including the mastermind and a hawala operator, under the Customs Act 1962.