The remand application submitted to the court by the DGCEI alleged that Joshi was “the key person who has meticulously planned evasion of central excise duty” by procuring unaccounted raw materials for manufacture and sale of the ‘Goa’ brand of gutkha without payment of duty. Joshi was arrested from his residence at Hari Niwas Circle in Thane (West).

According to the DGCEI, acting on specific information, its officers searched the office of the Raj Group of Companies in Thane (West) on February 17 and subsequently offices of three transporters in Bhiwandi. “These searches have resulted in the seizure of records maintained by the transporters, incriminating in nature, indicating transportation of clandestinely removed ‘Goa’ brand of gutkha from Jodhpur and Delhi by way of misdeclaration,” the DGCEI said.

Evidence collected from the Raj Group of Companies’ office include private documents in the form of handwritten loose sheets. These documents primarily relate to the purchase of unaccounted raw materials like tobacco, kimam, supari, perfumery items, katha etc. from October 2007 to February 15 for clandestine manufacture of gutkha, it said.

The raw materials were purchased for three franchisee units manufacturing ‘Goa Gutkha’ for sale in Maharashtra and the transactions were in excess of Rs 25 crore, it added.

While one factory in Jodhpur appeared to have clandestinely removed goods involving Central Excise duty to the tune of Rs 8 crore, a Delhi company allegedly headed by Joshi appeared to have cleared goods without payment of duty to Mumbai, involving central excise duty of about Rs 4 crore, it said.

“Duty evasion to the tune of Rs 12 crore appears to have been committed by these units within a short period of three to four months. It gives a fair idea about the extent of evasion involved,” the agency said.

Under the Central Excise Tariff Act (1985), gutkha is an excisable commodity subject to an aggregate duty at 66 per cent on 50 per cent of the MRP. According to the DGCEI, Joshi “has tried to distance himself legally from the affairs of these units... by making other persons their directors”.

The remand application also said that Joshi, in a statement recorded under section 14 of the Central Excise Act but retracted later, confirmed that he had worked as Director in all three franchisee units when they were established.

In court, defence lawyer Vijay Thorat argued that since Joshi was not a manufacturer of ‘Goa Gutkha’, he could not be booked for excise evasion in this case. Thorat also said since Joshi was willing to cooperate with the DGCEI and appear for questioning, there was no need for DGCEI to seek his custody.