It is obvious that CAG was defanged after its 2G spectrum and Coalgate reports.
Amid the dubious role played by jewellers and diamantaires in the past and the Comptroller & Auditor General naming and shaming them in its reports, no heed was paid to their shenanigans where they were clearly found to be in contravention of existing rules and regulations.
It is obvious that CAG was defanged after its 2G spectrum and Coalgate reports.
The CAG report on the department of revenue, Indirect Taxes, Customs No 6 of 2016, clearly points to how gem and jewellery makers were using the inept rules to stay out of the ambit of law.
For starters, the CAG inspection report also pointed to the insufficient SEZ rules to curb smuggling. The malleability and ductility of weak laws once again exposed and laid bare, but finding no takers in the government or PAC in Parliament of which CAG is an adjunct as it tracks where the government rupee is going and being spent.
This Performace Audit on natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof, imitation jewellery, coins must have been consigned to rubbish heap without due importance being given to its jargon.
The CAG had identified the epicentres of chicanery then too — asserting that 63 per cent of exports of jewellery were to the UAE and Hong Kong. For UAE very clearly, CAG averred that in 2015, 15 per cent of the total goods imported were from UAE and 29 per cent of the total like goods were exported to the UAE.
It found repeated transactions in gold, diamond, CPD (cut and polished diamonds) and jewellery between each of these four categories with the modus operandi showing a shadowy world of related party transactions, inverted duty structure, facilitation measures and re-export transactions.
Such was the blurring of lines and level of opacity that it wanted a distinction to be made between imports and exports from an economic, trading and revenue perspective. The CAG’s well-documented report, replete with a litany of acts of commission and omission, if taken seriously could have prevented the big scams that have come to light now.
The Customs Act 1962, according to CAG’s report No 6, empowers the department to confiscate goods on account of improper importation or mis-declaration and to initiate action to adjudicate the cases after issuing show cause notice.
The Directorate of Reve-nue Intelligence is functioning to prevent smuggling activities of prohibited goods and goods prone to evasion of customs duty which includes gold, silver, diamonds and other precious stones.
The CAG pointed out that in Cochin SEZ two instances of unauthorised removal of gold were reported which involved non-accountal of 10.5 kg of gold by Ashwin Gold Pvt Ltd noticed by the Preventive Wing and 900 gms of gold seized from an employee of Rajesh Exports by the DRI which was taken out of SEZ premises with authorisation.
