₹138 Cr Fraud of Customs Duty Evasion on Walnut Import Busted in Navi Mumbai; 5 Held so Far

• Five people have been arrested so far in the Nhava Sheva walnut import fraud case.

• The racket allegedly misdeclared consignments from China, the US and Chile as Afghan-origin shipments via Jebel Ali.

• Officials say the fraud hurt genuine traders, domestic walnut growers and government revenue.

Authorities have unearthed a sophisticated customs duty evasion racket involving fraudulent import of walnuts at Nhava Sheva in Maharashtra's Navi Mumbai, leading to a revenue loss of ₹138.84 crore, officials said on Wednesday.

Five persons have been arrested so far in this connection, they said.

Based on specific inputs, the Central Intelligence Unit (CIU) of Jawaharlal Nehru Customs House (JNCH) at Nhava Sheva conducted an 'Operation CO-FIND', which uncovered the syndicate, the officials said.

The consignments originating from China, the US and Chile were routed via Jebel Ali, UAE, and falsely portrayed as of Afghanistan origin to wrongfully claim preferential tariff benefits under the South Asian Free Trade Agreement (SAFTA), according to officials.

Under the scheme, the effective duty on walnuts was reduced from about 110% to roughly 5%, an official said.

The smugglers prepared forged transit bills of lading indicating movement from Bandar Abbas, Iran, to Jebel Ali to establish a fictitious transit trail and support the false country-of-origin claims, he said.

Coordinated searches at multiple locations in Mumbai led to the recovery of substantial digital and documentary evidence, the CIU official said, adding that five persons have been arrested so far.

On June 12, CIU officials arrested Sneh Dipakbhai Kakadiya, son of Surat businessman Dipakbhai Kakadiya, who agencies allege was one of the "masterminds" controlling financing, procurement, customs clearance and sale of the goods through proxy importers for monetary gains. He has been remanded to judicial custody for 12 days, the official said.

A country-wise import trend analysis for in-shell walnuts at JNCH showed an abnormal spike in Afghanistan-origin declarations during the period under probe, followed by an abrupt fall. The pattern was inconsistent with normal commercial seasonality and supported allegations of fabricated origin claims, he said.

The fraud distorted the market by enabling underpriced imports that harmed genuine traders and domestic walnut growers in Jammu and Kashmir, Himachal Pradesh, Uttarakhand and Arunachal Pradesh, and caused significant revenue leakage, the official said.

In a related development, the Bombay High Court, in a writ petition, recently declined a blanket order for the release of seized consignments claimed to be from Afghanistan, he said.

The court allowed conditional release only on deposit of the full differential duty of ₹2.78 crore or furnishing a bank guarantee of equivalent amount, endorsing the revenue's authority to secure recovery before clearance, the official said.

Further investigations were underway to identify all beneficiaries, facilitators, financial linkages and connected consignments, the official added.