• Notification Date: 19-11-2021
  • Notification No: 42/2021-22

GST intel raided laundering racket involving UP firm

NEW DELHI: In one of the biggest cases of money laundering unraveled in recent times, the Meerut zonal unit of the Directorate of GST Intelligence (DGGI) has initiated action in the alleged sale of Rs 5,000 crore worth of packaging materials by a less popular Noida-based company, Montage Enterprises, to 228 companies, all of which have been found to exist only on paper.

Five people have been arrested so far in the case, including two directors of Montage Enterprises who were remanded to 14 days of judicial custody on Tuesday by a chief judicial magistrate court in Meerut, as per information.

According to DGGI, searches on transporters and certain pan masala/tobacco companies revealed the mode of action where the Noida-based firm was found engaged in clandestine diversion of packaging materials against cash payments to some pan masala manufacturers.

The probe has led to a few of the pan masala companies to acknowledge cash transactions worth Rs 1,100 crore. The firms have since deposited Rs 50 crore against duty evasion. The total cash generated in this racket is several times of Rs 5,000 crore of the packaging materials allegedly supplied, said a source.

The seizure of unaccounted raw materials (bought in cash) and finished goods from one of the gutkha manufacturers, which has two Bollywood superstars as its brand managers, has been estimated to be worth over Rs 800 crore. The firm, after arrest of a senior executive, has deposited Rs 20 crore against duty evasion.