Employee who informed intelligence agency about customs duty evasion by own company says the long wait for reward discourages whistleblowers
Ihad left my job, had no other means of employment and was running short on savings in the three years after I turned whistleblower for the Directorate of Revenue Intelligence (DRI). Unfortunately, I got the reward only after six years when it means nothing to me,” said the 51-year-old entrepreneur who started his own business in 2016 after speaking out on the Customs evasion by his employer back in 2014 and quitting the firm.
With an annual turnover of his pharma products packaging company about Rs 4 crore today, the Rs 13 lakh he received from the DRI on January 21 this year only feels ‘like a bonus’, he said. The information provided by him led to a DRI raid and seizure of about Rs 75 lakh to Rs 1 crore in evasion, fines and penalties from the manufacturer of the pharmaceutical machines based in Ahmedabad.
The whistleblower used to work as the commercial manager for the firm in 2014. He was tasked with getting an ‘advance authorisation’ (import licence) for the company to procure parts of a machine that processes medication. The parts were to be imported from a company in France; the machine would be assembled in India and sent on export order to a firm in Turkey to complete the obligation as per Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and industry.
However, by the time the ‘advance authorisation’ came through from Delhi, the export order to Turkey had been fulfilled. So the company allegedly used the licence to import more of the same parts to build the machines for an order by an indigenous Indian firm based in the union territory of Puducherry.
Under the terms of licence, they had procured from the government, they had to export the machines out of India but did not do so, instead selling them in the local market and claiming false customs rebate on the imported goods. In 2016, the DRI paid the whistleblower Rs 1 lakh as part payment of the reward.
According to the DRI’s rewards system scheme, “The extent of reward depends upon the specificity and accuracy of the information, the risk and trouble undertaken …In exceptional cases, the reward can be as high as 20% of the value of confisca-ted goods and penalty realised.”
The whistleblower claimed he had not only informed the agency about the customs evasion, but also helped them in uncovering documents and calculate the amount of evasion. Still, he was kept waiting for six years for the reward.
On the payment of the rewards, the DRI website states, “The reward is disbursed only after conclusion of adjudication/appeal/revision proceedings.” In this case, the directors of the company, while paying up the customs evasion amount and fines, penalties and interest on the same in 2014, had done so ‘under protest’. The matter went before the CESTAT in 2017. But the company withdrew the case from the tribunal in September 2019 without a single hearing being held, thereby holding the seizure by the DRI correct. The reward still did not come, he rued.
Meanwhile, additional director general of DRI’s Ahmedabad Zonal Unit (AZU) as well as the superintendent investigating the case, were transferred. A high-ranking source in the DRI, defending the late payment of the remaining Rs 13 lakh to the whistleblower, stated, “Reward is decided only after the case and all appeals are settled.”
“In September 2019, the company withdrew the case from CESTAT and DRI officials stopped taking my calls for follow-ups in the case,” claimed the whistleblower. “This is the type of red tape and dilly-dallying attitude that discourages people from informing on bad practices,” he added.