Customs busts smuggling racket in Agarbattis through ASEAN FTA misuse

In a major drive against the smuggling of Agarrbattis from Vietnam, Customs officers on Wednesday arrested Bharat H. Shah and his son, Ronik Shah at Chennai after seizing 161.94 MT of Agarbattis and 68.36 MT of Agarbatti Powder which were found concealed in containers imported by M/s. Indian Agarbatti Manufacturers, Bangalore.

This is one of the biggest seizures of restricted items in recent times at the port.

The importer had declared to the Customs that these containers contained Joss powder and Premix powder for making incense sticks. Joss powder is normally chargeable to 15 per cent Customs duty but the duty is 'Nil' under the Free Trade Agreement (FTA) with ASEAN which includes Vietnam.

The importer was thus trying to take advantage of the FTA as well as use the items covered thereunder to conceal and smuggle restricted Agarbattis. The product is placed in the restricted category since August last year and cannot be imported without a licence.

Acting on credible input that some unscrupulous importers were clandestinely smuggling Agarbattis from Vietnam after the item was restricted for import, the Customs used data analytics to identify the suspect importer, M/s. Indian Agarbatti Manufacturers.

Thereafter, a tight watch was kept on its six imported containers that had landed at Chennai port. The containers said to contain Joss powder and Premix powder for making incense sticks revealed huge quantities of undeclared Agarbatttis and Agarbatti powder cleverly concealed behind the declared goods.

In a swift follow up action, the Customs officers searched the office and residential premises of the importer at Banglore and apprehended Bharat H. Shah and Ronik Shah, both of whom had planned the smuggling.

Upon enquiry they revealed they had ordered two more containers from Vietnam, which were in the pipeline. At Chennai port these two containers were identified and searched, again revealing concealed Agarbattis in huge quantity.

The seizures and arrests are part of a nation-wide drive by the Customs to stop the smuggling of Agarbattis, which are on the restricted list of import.

It may be noted that on account of large scale misuse of ASIAN FTAs a review of or  complete withdrawal from the FTAs are being demanded by  Indian Manufacturers.