The Law Enforcement Department said on Wednesday it seized 2.90 crore in “unrecorded” cash, a few cell phones and computers after raiding some human hair exporters in Andhra Pradesh.
He said the searches were carried out under the provisions of the Foreign Exchange Management Act (FEMA) and that eight premises of such traders in the state’s West Godavari district were covered.
‘Twelve cell phones, three laptops, one computer, handwritten dairy products,’kasha“(Gross) books of accounts and unrecorded cash of Rs 2.90 crore have been seized,” the agency said in a statement.
He added that these exporters “could not explain” the source of the species found on their premises.
The agency said it came across the case while investigating a separate money laundering case against certain Chinese online betting apps (internet apps).
“It has been noticed that hawala payments of Rs 16 crore have been made to human hair merchants and as a result a FEMA investigation has been opened against the hair merchants based in Telangana and Andhra Pradesh” , did he declare.
The investigation revealed that “many domestic traders gathered and sold raw hair to foreign traders based in Hyderabad, Guwahati and Kolkata”.
“This hair is smuggled out of India via road points in Moreh (Manipur), Zokhawthar (Mizoram) and Aizawl (Mizoram) etc to Mandalay in Myanmar,” said the managing director.
Ultimately, this hair ends up in China, where it is labeled as domestic and processed Chinese hair, he said.
“Chinese traders are thus able to avoid 28% import duties at the time of importation and also gain 8% export incentives at the time of export by claiming that Indian hair contraband is Chinese hair, ”the agency said.
Many Indian exporters, he said, are also suspected of undervaluing exported human hair in terms of value / quality to evade import duties in the recipient country.
He said the raids revealed that two Hyderabad-based traders received Rs 3.38 crore for nationwide sale to traders in the northeast via “illegal” Chinese apps such as Linkyun Technology Private Limited’s Paytm accounts. and Dokypay Technology Private Limited Company.
“Few of Myanmar citizens are permanently stationed in Hyderabad and buy human hair locally and then export it to Myanmar using IEC (import and export code) of Indian people / entities at dumped prices .
“The amount of the difference is settled either locally or through Hawala channels,” he said.
The agency said it prima facie suspects that human hair exported to Myanmar, Bangladesh, Vietnam, Austria, etc. were underbilled.
“There was further evidence that some entities received payments for the sale of human hair into their employees’ bank accounts and subsequently money was withdrawn and returned to their owners.
“Most exporters do not keep proper books of account and also evade income tax,” he said.