Korean steel behemoth Posco has big plans for India, including a foreign direct investment (FDI) worth $12 billion (approximately Rs. 64,123.63 crore) for a steel mill in Orissa.
However, its plans may run into rough weather as the Directorate of Revenue Intelligence (DRI) has slapped a penalty of close to Rs.10 crore on one of its associate companies in India, POSCO India Delhi Processing Centre (IDPC), for alleged tax evasion. The customs department has also ordered the confiscation of goods worth aboutRs. 200 crore imported by the company.
POSCO India Private Limited, another group firm under which the steel mill in Orissa is being set up, told NDTV in an email, “POSCO IDPC and POSCO India Private Limited are different entities. This news should not relate to POSCO India Private Limited.”
The case pertains to the import of some varieties of stainless steel (EN 1.4512, ASTM 304L, JIS G 4312, SUH 409L) on which anti-dumping duty is applicable. The DRI has alleged that Posco IDPC evaded the duty.
Apart from the penalty, the Rewari, Haryana-based IDPC has been asked to pay an anti-dumping duty of about Rs. 1.5 crore.
In an order, a copy of which NDTV has accessed, the customs department has said that Posco can appeal in the higher Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
Posco India plans to build steel plants in Orissa and Karnataka. It is also looking at setting up a steel plant in a joint venture with state-owned Steel Authority of India. Currently, IDPC has a processing center in Haryana where it imports cold-rolled stainless steel for processing.
DRI officials told NDTV that transactions in the steel and iron ore sector have been under the department’s radar for a while now. In December 2012, the department even ran ads in national dailies saying it has detected close to 300 tax evasion cases worth more than Rs. 700 crore. After a detailed investigation, the DRI discovered the imports by IDPC through the Kandla port in Gujarat, the officials claimed.
Apart from the company, notices have also been served on the Daeho Shin, chief financial officer of IDPC, and another official.
[Source — NDTV]