The statement also said that so far the investigating agency has estimated around Rs 24 crore availed of as Cenvat credit by the company. The company has deposited Rs 12 crore towards the liability.
During preliminary inquiry, the key officials of Bhushan Steel including their vice chairman-cum-managing director (Neeraj Singal) admitted to the modus operandi and an amount of Rs12 crore has been deposited towards their duty liability, the statement said.
According to the DGCEI, the company which produces hot and cold rolled galvanized products, was availing of the benefit of the tax credit on purchasing zinc ingots from Hindustan Zinc Lt, Haridwar, without actually receiving the goods. The credit was being availed of on the basis of invoices generated on the purchase though goods were not actually received.
Explaining the modus operandi of the company, the statement said that despite having an arrangement with Hindustan Zinc for transporting the products (known as FOR or free on receipt), Bhushan Steel used its own transportation, especially for supplying to Khopoli unit. The zinc purchased was then transported through Udaiput-based Mewar Transport and diverted to traders based in Delhi, Aligarh and Agra.
Though products were unloaded in these places, the invoices and general records for the same was first sent to Bhushan Steels Sahibabad office and from thereon to Khopoli unit for availing of the Cenvat credit.
Following intelligence operations, the DGCEI under the Central Board of Excise and Customs raided the factory and godowns at 14 places across Delhi, Maharashtra, Uttar Pradesh, Uttarakhand, and Rajasthan. The raids were also conducted at traders godowns in Delhi, Aligarh and Agra while office of transporter was also searched in Udaipur and Haridwar, the statement said.
Payments were reportedly received in cash for zinc ingots sold to the traders. Entire operation was orchestrated by the assistant vice president (finance) under direct supervision of vice chairman-cum-managing director of Bhushan Steel group, the statement added.