As reported by The Indian Express (July 5, 2008), the Customs Department had informed the finance ministry it had detected a huge customs duty evasion scam in which “top corporate honchos” who held NSOP permits had “hoodwinked customs to deliberately evade duties”. The duty evasion by these “bigwigs of Indian industry may be to the tune of several hundred crores”, it said.

The current week’s status report with the Central Board of Excise and Customs (CBEC) reveals that evasion cases have been built up against individual NSOP holders after their log books and bills of entry were scrutinised and statements of members of the aircraft companies recorded.

Early this week, the customs department had seized and later released five aircraft following the deposit of hefty bank guarantees by four errant companies: Reliance Commercial Dealers Pvt Limited (duty and penalty Rs 98 crore), GMR Aviation Pvt Ltd (Rs 27 crore), East India Hotels Ltd (Rs 13 crore) and Bharat Hotels Ltd (Rs 6 crore). Adjudication proceedings will now commence against these companies and a final case of duty evasion possibly made out.

Significantly, customs officials say they have detected “rampant” misuse of the scheme introduced in 2007 vide a notification that exempted customs duty for non-scheduled operators. At present, data of the Directorate General of Civil Aviation (DGCA) reveals

that 86 companies hold the NSOP permits, with a total of 252 aircraft given licenses under the scheme.

Investigations and seizures are proceeding on a case-to-case basis and officials admitted that the scam was being unravelled with the assistance of the DGCA.