Massive Customs Fraud Busted: Rs 138 Crore Duty Evasion Scheme Uncovered in Walnut Imports

Massive Customs Fraud Busted: Rs 138 Crore Duty Evasion Scheme Uncovered in Walnut Imports​

Authorities have successfully exposed a high-stakes customs duty evasion racket involving the fraudulent import of walnuts at Nhava Sheva in Navi Mumbai. The sophisticated syndicate was found responsible for a massive revenue loss amounting to Rs 138.84 crore, officials stated on Wednesday. In connection with 'Operation CO-FIND,' conducted by the Central Intelligence Unit (CIU) of Jawaharlal Nehru Customs House (JNCH), five individuals have been arrested so far.

Deception Behind the Walnuts: How the Fraud Operated​

The elaborate smuggling scheme involved consignments that originated from countries including China, the US, and Chile. These international goods were routed through Jebel Ali in UAE before being falsely declared as originating from Afghanistan. This misrepresentation was intended to claim preferential tariff benefits under the South Asian Free Trade Agreement (SAFTA).

Under the fraudulent mechanism, the effective duty rate on these walnuts was significantly reduced from approximately 110 per cent to roughly 5 per cent, allowing criminals to generate illicit monetary gains. To support this false origin claim, smugglers prepared forged transit bills of lading indicating movement from Bandar Abbas in Iran to Jebel Ali, establishing a fictitious transit trail.

Enforcement Action and High-Value Arrest​

Coordinated searches across various locations in Mumbai led the CIU officials to recover substantial digital and documentary evidence related to the operation. Sneh Dipakbhai Kakadiya, son of a Surat businessman, was arrested on June 12 as one of the alleged "masterminds." Agencies assert that he controlled financing, procurement, customs clearance, and sales through proxy importers. He has been remanded to judicial custody for 12 days.

A country-wise import trend analysis conducted at JNCH revealed an abnormal spike in Afghanistan-origin declarations during the period under investigation, followed by an abrupt decline. This pattern was inconsistent with normal commercial seasonality, strongly supporting allegations of fabricated origin claims.

Market Distortion and Judicial Scrutiny​

The successful execution of this fraud severely distorted the market for walnuts. By enabling underpriced imports, the scheme negatively impacted genuine traders and domestic walnut growers in various states, including Jammu and Kashmir, Himachal Pradesh, Uttarakhand, and Arunachal Pradesh. The operation caused significant revenue leakage to the state.

In a related development concerning the seizure process, the Bombay High Court recently addressed the consignments claimed to be from Afghanistan. The court declined a blanket release order but allowed conditional release only upon deposit of the full differential duty amounting to Rs 2.78 crore or furnishing a bank guarantee of equivalent value. This ruling reinforces the revenue authorities' power to secure recovery prior to clearance.

Further investigations are actively underway by the CIU to identify all connected consignments, financial linkages, and beneficiaries involved in this massive evasion network.