Authorities Bust Major Rs 138.84 Crore Walnut Customs Duty Evasion Racket
Customs authorities have busted a Rs 138.84-crore racket involving fraudulent walnut imports at Nhava Sheva. The syndicate bypassed high tariffs by falsifying the country of origin, causing significant revenue loss and market distortion. Five individuals, including key mastermind Sneh Dipakbhai Kakadiya, have been arrested.
Highlights
- •Authorities dismantled a Rs 138.84 crore customs duty evasion racket involving fraudulent walnut imports.
- •The syndicate used forged documents to falsely claim preferential tariff benefits under the SAFTA agreement.
- •Five people, including suspected mastermind Sneh Dipakbhai Kakadiya, have been arrested by the CIU.
- •The Bombay High Court denied a blanket release of seized goods, mandating full duty deposits.
Authorities have successfully dismantled a massive customs duty evasion racket that caused a staggering revenue loss of Rs 138.84 crore. The illicit operation, discovered at the Jawaharlal Nehru Customs House (JNCH) in Nhava Sheva, involved the fraudulent importation of walnuts, according to official reports released on Wednesday.
The investigation, dubbed 'Operation CO-FIND', was executed by the Central Intelligence Unit (CIU) following specific intelligence reports. Preliminary findings reveal that shipments of walnuts, originally sourced from China, the United States, and Chile, were deceptively rerouted through Jebel Ali, UAE. To bypass standard taxation, the perpetrators falsely declared the goods as originating from Afghanistan. This fabrication allowed them to wrongfully claim significant preferential tariff benefits under the South Asian Free Trade Agreement (SAFTA).
Details of the Customs Duty Evasion Racket
Under the manipulated scheme, the effective duty on these walnut imports was drastically reduced from approximately 110 percent to just 5 percent. To maintain the facade of legitimate trade, the smuggling network utilized forged transit bills of lading, which falsely indicated the cargo was moving from Bandar Abbas, Iran, to Jebel Ali. This created an entirely fictitious transit trail designed to validate the fraudulent country-of-origin claims.
Coordinated raids conducted at various locations across Mumbai yielded substantial digital and documentary evidence, confirming the organized nature of the syndicate. As a result of these operations, five individuals have been arrested. Among those taken into custody on June 12 is Sneh Dipakbhai Kakadiya, the son of a prominent Surat businessman. Investigators allege that Kakadiya acted as one of the primary masterminds, overseeing everything from financing and procurement to customs clearance and the final distribution of the goods through proxy importers.
The impact of this customs duty evasion racket extended far beyond government revenue losses. By flooding the market with underpriced, illegally imported goods, the syndicate severely distorted fair competition. This harmed legitimate traders and domestic walnut growers operating in regions such as Jammu and Kashmir, Himachal Pradesh, Uttarakhand, and Arunachal Pradesh.
Legal Proceedings and Market Implications
A statistical analysis of walnut import trends at JNCH revealed an suspicious and abnormal spike in declarations of Afghanistan-origin walnuts during the period under investigation, followed by a sharp and sudden decline. This pattern was inconsistent with standard commercial seasonality, providing further evidence of the fabricated claims.
Legal actions are already moving through the court system. Recently, the Bombay High Court addressed a writ petition regarding this case, declining to issue a blanket order for the release of the seized consignments. The court maintained that any conditional release of the goods would require the deposit of the full differential duty—totaling Rs 2.78 crore—or the provision of a bank guarantee for an equivalent amount. This decision reinforces the authority of customs officials to ensure revenue recovery before goods are cleared for market entry. Further investigations are currently underway to uncover additional beneficiaries, facilitators, and financial links connected to the scheme.
