The directorate general of central excise intelligence (DGCEI), Pune, on Tuesday night arrested two directors and a share holder of M/s Rutuja Ispat Private Limited (RIPL) at additional MIDC in Jalna for allegedly evading excise duty of over Rs 9 crores.

The directors, Shailesh Badjate (33), his brother Sushil (35) and their father Subhashchandra (63), who is also their share holder, are residents of Jalna. The RIPL is engaged in the manufacturing of MS/TMT bars falling under chapter 72 of the first schedule of the Central Excise Traffic Act, 1985. Shailesh and Sushil are responsible for the production, sales and payment of all taxes and dues of the company.

The DGCEI had received specific information that the RIPL was indulging in large scale evasion of central excise duty on MS/TMT bars by way of clandestine manufacture and clearance.

The DGCEI officers on June 6 conducted searches at the RPIL, office and residence of the Badjates, godown,
residence of employees Sopan Inkar and Govind Battalvar and recovered various records, documents, nine
pen drives containing details of
removal of TMT bars without payment of excise duty.

The searches had led to the recovery of a plastic bag containing Rs 45 lakh, which was concealed in the covered loft of the bathroom attached to the bedroom of Subhashchandra. Subhashchandra and Sushil could not produce any valid and legal evidence of illicit possession of the cash amount.

During interrogation, Sushil admitted that one of the pen drives contained details of manufacture and sale of MS/TMT bars by RIPL between January 1, 2009 and March 7, 2011. He retrieved the data of three pen drives and took out the print outs of the information contained there in, but he could not retrieve the data of the six pen drives as those were very old.

The preliminary scrutiny of the printouts revealed that the RIPL had evaded excise duty of over Rs 9 crores and Sushil had admitted that the actual manufacturer and sale of TMT bars were much higher than the official records and that the consideration for sale of clandestinely removed MS/TMT bars had been received in cash.

The RIPL former accountant Prashant Jadhav in his statement admitted of entering the data regarding sales proceeds in the pen drive at Sushil's behest. Jadhav had stored the data in the name of "Bajrang" appearing on the top of the printouts.

Another employee, Gopal Tak, gave a statement that he was preparing the invoice of sales at the behest of Sushil and was handing over the cash to either of the directors and in case of cash sales the office copy of the invoice was given to the directors and the duplicate transporter's copy of the invoice was taken back after the goods were delivered to the customers and in such cases no records were maintained except in the pen drive.

Senior intelligence officer J S Bhat produced the arrested before chief judicial magistrate N T Ghadge on Wednesday. Bhat filed a plea to sent the trio to magisterial custody. The central government standing counsel Krishna Ratnaparkhi told the court that Sushil and Shailesh were summoned for questioning on various occasions, but they did not cooperate with the DGCEI.

Ratnaparkhi said Subhaschandra was the largest share holder of the company and the cash recovered from his bathroom makes it clear that he was receiving a major amount from the sale proceeds clandestinely.

According to Ratnaparkhi, some employees of RIPL and M/s Badjate and Associates (run by Suhashchandra) have opened accounts at Buldhana cooperative credit society limited, Jalna branch. The employees have admitted in their statements that the accounts were operated by Shailesh and Sushil and that they were not aware of the deposit and withdrawal of the huge amounts. Ratnaparkhi argued that a deeper probe into the roles of Shailesh and Sushil is needed.

The sessions court at Jalna had rejected the anticipatory bail pleas of the suspects on June 23, he added.

Defence lawyer S K Jain submitted that the suspects have cooperated with the investigating officer and their detention was not essential. Jain filed a plea to release them on bail and relied on a Bombay high court ruling.

The court reserved its final order till Thursday and sent Shailesh and Sushil to magisterial custody till August 19 and granted interim bail to Subhaschandra on a personal bond of Rs 15,000 as he was a senior citizen.

The DGCEI had received specific information that the RIPL was indulging in large scale evasion of central excise duty on MS/TMT bars by way of clandestine manufacture and clearance.