The Hindu Business Line : Duty evasion in cloves, cardamom imports suspected

SPICES such as cloves and cardamom are reportedly being imported by under-invoicing and giving wrong declaration of their origin as Pakistan or Bangladesh, despite the fact that they do not grow the crop.

The first such incidence came to light early last year when the Kochi Customs detained a consignment of 24 tonnes of cloves imported from Pakistan by a Bangalore-based company. When the Spices Board took up the issue with the Indian embassy in Islamabad, it was revealed that clove was not grown in Pakistan.

Now the same company has imported 48.14 tonne of cloves from Karachi via Tuticorin port on March 27 in vessel MV X-Press Kaveri - voyage no. 604. As this company is not registered with the Spices Board, details of its imports and exports have not been reported to the board.

Clove is also reported to be entering the country via Kolkata as the produce of Bangladesh.

Meanwhile, on suspicion of under-invoicing, the Customs authorities in Jaipur, Rajasthan, detained 700 tonnes of cloves imported into the State. Investigations are on to find out the actual world market price of the commodity.

The value given in the documents was $2,500 a tonne, which the customs authorities thought was "prima facie heavily under invoiced", official sources told Business Line on Tuesday. They said, on request from the importers, they were now permitted to re-export the consignments after taking adequate financial guarantee (bond and bank guarantee) to cover the penalty if under-invoicing is conclusively proved.

To ascertain the actual price, investigations were under way through various agencies, the sources said. According to them, all such imports into the country need to be probed. Besides, they suggested that imports of such commodities should be allowed only through the Chennai and Mumbai for proper monitoring.

In the international market, according to the Spices Board, the price of cloves was ruling above $3,100 a tonne in March. During March, 1,185 tonnes of cloves were imported, valued at Rs 16.44 crore ($3.76 million).

The total import of cloves in 2004-05 was 7,900 tonnes, valued at Rs 116.02 crore ($26.11 million) at a unit value of Rs 146.86 a kg. Against this, imports in 2003-04 were 15,678 tonnes, valued at Rs 137.42 crore ($29.95 million) and unit value was Rs 86.66 a kg, said Mr S. Kannan, Director (Marketing), Spices Board.

Indian traders who import such commodities for domestic consumption from their neighbours would get a 90-per cent concession on the prevailing duty imposed by the Government. In fact, the Government had reduced import duty on cloves to 35 per cent from 70 per cent and yet under-invoicing takes place, official sources said.

Similarly, 18.75 tonnes of Guatemala cardamom from Singapore and 18.85 tonnes from Guatemala were imported by Mumbai and Chennai-based firms, respectively, through the Tuticorin in March last. Trading sources alleged these consignments were under invoiced.

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