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Nirav Modi under DRI scanner
DRI alleged Modi violated import-export norms
By: Diamond World News Service
Aug 14 2015 3:48PM
Reference: 11806  

The Directorate of Revenue Intelligence (DRI) is investigating diamond jewellery Nirav Modi for apparent violation of import-export norms, reports say. The DRI alleges that the jeweller diverted imported, duty-free, cut and polished diamonds and pearls to the domestic market, which according to the DRI is a violation, reports add.

Nirav Modi joined the list of billionaires, with his high-value jewellery making appearances at auctions by renowned houses like Christie’s and Sotheby’s.

Reports further suggest that the DRI probe noted that imported, duty-free, high-value, cut and polished diamonds were being routed to the domestic market and low-value diamonds were being used for jewellery manufacturing for the export markets like Hong Kong and UAE. Two showcase notices were issued by the DRI’s Mumbai zonal unit in June, to Modi and his three firms, namely Firestar Diamond International Pvt Ltd, Radashir Jewellery Company Pvt Ltd and Firestar International Pvt Ltd. The notices The showcause notices demanded penalty worth Rs 37.16 crore. The three Nirav Modi firms import duty-free diamonds, pearls and gold for manufacturing jewellery at the Surat SEZ, exclusively for export after value addition, reports add. Also, according to reports Nirav Modi did deposit Rs 48 crore towards duty demand, penalty and interest and written two letters to the commissioner of central excise and service tax in Surat, requesting to close the case.

Nirav Modi’s office responded as being ‘a law abiding company’ and that opinions regarding valuation of various diamonds and pearls imported by the company differ between the office and DRI. The office noted it would follow the law and cooperate with authorities, to reach a solution without any demerit to its position.

The violation was noted first in December 2014, and after specific intelligence, the DRI put a halt to the group’s various export consignments of diamond-studded gold jewellery to Hong Kong, UAE, US and Canada locations. The agency cited the jewellery for Hong Kong and UAE were of “very low quality”. The cost was analysed by a government-approved valuer who put the consignment cost at one-tenth of the declared cost, stated DRI, reports say.

Also, DRI officials visited the factories at Surat SEZ, verified the stock of imported duty-free raw material, to find a large difference in comparison to cut and polished diamonds and pearls,” a DRI official said. It found cut and polished diamonds worth Rs 100 crore in stock at the factories while the declared stock was Rs 1,100 crore and pearls in stock was worth Rs 4 crore, while the declared stock of over Rs 100 crore, reports say.

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