New Delhi: The Economic Offences Wing (EOW) of the Mumbai Police arrested two Surat-based businessmen, Yogeshkumar Chalthanwala (53) and Sunil Badriprasad alias Bende or Patel (55), in August 2024 for their involvement in a ₹10 crore fraud. The duo was part of a larger network that illegally sold Customs Duty Credit Scrips (CDCS), deceiving three businessmen in the process.
What Are CDCs?
Custom Duty Credit Scrips are export incentives provided by the government that will help an exporter to reduce the import duties. These scrips, offered under specific schemes in India’s Foreign Trade Policy, are generally given 2% to 5% of the realized FOB value, depending on the goods and the destination country.
The accused took advantage of this system by forging Know Your Customer (KYC) details on the Indian Customs Electronic Gateway (ICEGATE) portal. This forgery allowed them to access unclaimed rebates meant for legitimate importers.
How the Scheme Was Uncovered?
The racket was discovered during a broader investigation by Delhi Police into similar CDCS-related frauds. Authorities noticed unauthorized claims were draining government funds. During the investigation, they questioned Shreyas More, the director of Tam India Private Limited, who revealed crucial details.
According to More, in 2022, Chalthanwala and Badriprasad had approached him. Acting as directors of companies such as Vaibhavi Tex Fable, S R Enterprises, and Fabules Corporations, the accused offered to sell CDCS, including Rebate of State and Central Taxes and Levies (ROSTCL), at a discounted rate of 4%.
After verifying the scrips on the ICEGATE portal and receiving email confirmations, More’s company transferred ₹5 crore through Real-Time Gross Settlement (RTGS). Two other associates of More also purchased scrips worth ₹5 crore and ₹2 crore at an 8% discount. Subsequent investigations showed that the accused had forged KYC documents and manipulated One-Time Passwords (OTPs) to claim and sell these rebates illicitly.
Chalthanwala and Badriprasad have been booked under various sections of the Indian Penal Code (IPC) for cheating, forgery, breach of trust, and using forged documents, apart from the Information Technology Act.
This case highlights significant vulnerabilities in the export incentive system and emphasizes the need for stricter verification processes to prevent fraud.
In a related incident, the Mumbai Police’s EOW arrested two more individuals from Surat for a ₹12 crore scam related to customs export duty fraud. The arrests are part of ongoing efforts to curb misuse of government incentive schemes.
Businesses are advised to exercise due diligence when engaging with intermediaries offering government-issued incentives at discounted prices. If such offers are verified through official channels, it would not result in financial loss.
Authorities are actively investigating these cases to identify other members of the syndicate. Efforts are also being made to strengthen the security of the ICEGATE portal to prevent unauthorized access and ensure incentives reach the rightful beneficiaries.
These incidents highlight the importance of regularly updating security measures on digital platforms handling sensitive transactions. The collaboration between law enforcement agencies has proven crucial in tackling such complex frauds.
This, of course, is preliminary in the investigations, and more will surely come out as the real extent of the fraud becomes known, along with what is being done to try to prevent it. Keep up to date and continue to be on the alert to avoid being scammed.
