News

Two Government agencies have come up with differing versions over an alleged under-invoicing racket by Distilleries Company of Sri Lanka (DCSL), with Customs investigating a company official over the scam, while the Excise Department gave a clean slate to the company.

Two days after The Sunday Times reported how the company had allegedly imported whisky, brandy and gin under a cheaper Customs classification and which, if true, would defraud the country of Rs. three billion in taxes and duties, Deputy Commissioner Excise Department S. Sivanathan told The Sunday Times he had inspected the DCSL factory at Seeduwa, where the spirits in question is stored, but didn’t find any irregularities. He said the Department is in the process of compiling its report.

“Last Sunday after the reports appeared in the media, I was told by an ‘informant’ about the DCSL issue and on Tuesday visited the factory, but did not find anything irregular,” he said.

However the Customs investigated the Nawala premises of Periceyl Ltd, a subsidiary of DSCL, on Wednesday and recovered documents and CDs pertaining to the investigation.

“We found some documents and CDs along with other materials,” a Customs official said. A company official is being questioned, he said.

Customs sources are sceptical about the issue, saying that DCSL officials have connived to ‘clear the air’ by getting around Excise Department officials. “When there is a pending inquiry by the Customs, the Excise Department should have informed us about its own investigations,” a Customs official said.
Commissioner General of Excise Parakrama Bandara told The Sunday Times that Excise officials can inspect any factory at any time.

Director General Customs Sarath Jayatilake told The Sunday Times that some ‘ground investigations’ are on.

“We are conducting some ground investigations on the company and at present we are not jumping to conclusions,” he said.

Customs is in the process of recording statements from DCSL officials.

“According to these statements, there were two foreigners attached to the DCSL subsidiary, Periceyl, who were involved in the alleged under invoicing and they have left the country,” a Customs source said.

The Sunday Times reported last week how the Customs stumbled on a DCSL invoice when company officials came to amend their alcohol spirit importing company name from Periceyl Private Limited, which is the bottling arm to DCSL itself. It is estimated that about 900,000 litres would have been imported up to 2006 – paying only Rs.67.5 million as duty. Customs has also estimated the total alleged fraud to Rs.1500 million with VAT and Excise duty amounting to Rs.1500 million.

Customs officials argued that if the company has paid proper duties for the import of brandy, whisky and gin DCSL wouldn’t have been able to sell at a low range as it does now compared to the market rate for these foreign liquors.

Distilleries Company Chairman Harry Jayewardene yesterday confirmed a Customs inquiry was underway against a subsidiary company of the DCSL, but denied the allegations against this company.

“There can be allegations but they are not correct,” he told The Sunday Times.