January 26, 2016
Intelligence agencies have stumbled upon what they say may be a major money laundering scam running into hundreds of crores of rupees in the tile-manufacturing hub of Morbi in Gujarat while investigating excise duty evasion by local units.
The probe has brought to light a complicated modus operandi with units overinvoicing raw material supplies and under-invoicing sales of finished goods to avoid excise duty.
Payments for under-invoiced components were said to have been made to accounts opened by shroffs on a temporary basis and then closed after the transactions. “These effectively act as the fundtransfer agents for these units,” said an official aware of the investigation. Morbi, near Rajkot, has about 450 tile units…