MM TAX CLUB

Directorate of Enforcement (ED) has attached immovable properties of M/s Sarvana Stores (Gold Palace) Chennai amounting to 234.75 Crore rupees in relation to a Money Laundering case for defrauding Indian Bank. ED initiated an investigation under the PMLA, 2002 based on the FIR dated 25.04.2022 registered by the CBI, EOW, Chennai. The Directorate of Enforcement had recorded the case on 26.05.2022 under the provisions of the Prevention of Money Laundering Act.

It is alleged that Late Shri Pallakudurai, Smt P. Sujatha and Shri Y.P. Shiravan Partners of M/s Saravana Stores (Gold Palace) with the criminal intention to cheat Indian Bank, T. Nagar Branch, Chennai had conspired with unknown Public Servants and unknown others.

Investigation revealed that M/s Saravana Store (Gold Palace) Chennai has applied for sanctioning of loan by fabricating Balance Sheet and projecting sound financial health of the firm. There is a huge mismatch between the sales reported and credit entries of the firm. The said firm has presented a cosmetic picture of expected turnover for upcoming financial years at the time of availing loan. Further, in order to cheat Indian Bank, a significant wrongful loss and deriving personal gain, the firm in collusion with Property Valuer, Bank Officials, and certain private persons proposed to purchase assets at a price which is clearly much higher than the real fair market value. The investigation conducted by Enforcement Directorate under the PMLA, 2002 has adequately established the ill motives of accused individuals and Bank officials from the inception.

Investigation revealed that the accused persons overstated the inventory, transferred the assets without the knowledge of the Bank, used the OCC limits to repay the term loan, misappropriated and diverted the funds for which it was not sanctioned, and committed other irregularities and thereby, the said accused persons and firms cheated the Bank and caused wrongful loss to the Bank and corresponding wrongful gain to themselves. The accused company has generated Proceeds of Crime amounting to Rs240 Cr out of criminal activities.

Further investigation is in progress.

Directorate of Enforcement has arrested Khagesh Kachhwal & Varanasi Dileef in a money laundering case on 25/6/2022 for acting as entry operators and facilitating large scale bogus LC discounting and providing large accommodation entries to assist money laundering activities of the Bank Fraud accused persons.

ED initiated money laundering investigation on the basis of FIR registered by the CBI, EOB, Chennai, against M/s RE Cables & Conductors Pvt Ltd (RECC) and others for alleged misappropriation of the funds of SBI and caused wrongful loss to the tune of Rs 74.83 Crore.

Investigation by ED revealed that Khagesh Kachhwal and Varanasi Dileef are one of the biggest entry providers in Hyderabad city under whose assistance and guidance, M/s RECC had fraudulently mis-utilised the credit facilities availed from Banks. Khagesh Kachhwal and Varanasi Dileef are having number of shell entities under their control.The modus operandi is that various LCs are opened by M/s RECC in the name of Shell Entities controlled by Khagesh Kachhwal & Varanasi Dileef under the guise of short term advance with the help of bogus documents. No goods/materials are supplied against such LCs. Subsequently, the LCs were discounted with a known bank and the amount received by discounting is diverted back to M/s RECC so that it can tide over its cash flow crunch. Since RECC did not make the payments to the bank, the LCs devolved causing loss to the Bank.

Both of the accused admitted that they are providing these services for pecuniary gain of 0.25% of the transaction amount. Apart from M/s RECC, they have provided such services to many business houses of Hyderabad including businesses who are now accused of large Loan Frauds including M/s Golden Jubilee Hotels, M/s VNR Infra Pvt Ltd, M/s Transstroy India Ltd, etc. Their business of bogus entries is running into several hundreds of Crore worth of transactions.

Khagesh Kachhwal and Varanasi Dileef were arrested and produced before the Hon’ble Special PMLA Court on 25.06.2022 and Hon’ble PMLA Court has granted 8 days’ of ED custody of the accused persons.

Further investigation in this case is going on.

CBIC vide notification number 02/2022-Central Excise (N.T.) dated 30thJune, 2022 issued Central Excise (Amendment) Rules, 2022 by amending rule 18 and rule 19 of the Central Excise Rules, 2017;

In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules to amend the Central Excise Rules, 2017, namely: -

1. Short title and commencement.-

(1) These rules may be called the Central Excise (Amendment) Rules, 2022.

(2) They shall come into force on the 1stday of July, 2022.

2   In the Central Excise Rules, 2017 (hereinafter referred to as the said Rules), in rule 18, before the      explanation the following proviso shall be inserted, namely: -

“Provided that nothing contained in this rule shall apply to Motor spirit, commonly known as petrol, High-speed diesel oil and Aviation Turbine Fuel.

3.  In the said Rules, in rule 19, the following proviso shall be inserted, namely: -

“Provided that nothing contained in this rule shall apply to Motor spirit, commonly known as petrol, High-speed diesel oil and Aviation Turbine Fuel”

Notification No. 11/2022-Central Excise dated 30^th June, 2022

In exercise of the powers conferred by section 112 of Finance Act, 2018 (13 of 2018) , read with section 5A of the Central Excise Act,1944 (1 of 1944) (hereinafter referred to as the Excise Act), the Central Government being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government  of  India  in  the  Ministry  of  Finance  (Department  of  Revenue),  No. 04/2019-CentralExcise,datedthe  6thJuly, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R.487(E), dated the 6^th July, 2019,namely:-

In the said notification, after the Table, the following shall be inserted, namely: -

“2. Nothing contained in this notification shall apply to the goods cleared for export.

”3.This notification shall come into force on the 1stday of July, 2022.

DGFT vide Notification number Notification No: 15 /2015-2020 dated 7-July, 2022 extended deadline for submission of applications under Merchandise Exports from India Scheme (MEIS) for exports made in the 4 months period Sept 2020 to Dec 2020.

In exercise of the powers conferred by Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with Para 1.02 of the Foreign Trade Policy, 201520, the Central Government hereby makes the following amendments in para 3.13 A of the Foreign Trade Policy 2015-20 as notified vide Notification No. 58 dated 07.03.2022, with immediate effect, as below:

Effect of Notification: The last date for submitting application under MEIS, for exports made in period 01-09-2020 to 31-12-2020, has been extended upto 31-08-2022.