DRI exposes ADD Avoidance Scam on import of Chinese-Origin Hydraulic Rock Breakers routed through Malaysia

In a major enforcement action, the Directorate of Revenue Intelligence (DRI) has exposed a large-scale anti-dumping duty (ADD) avoidance scam involving Chinese‐manufactured hydraulic rock breakers and chisels falsely declared as originating from Malaysia.

The scheme is estimated to have caused revenue losses of approximately ₹250 crore. Raids were conducted simultaneously in New Delhi, Kolkata, Bengaluru, Ahmedabad, and Mumbai.

According to sources, importers manipulated origin and valuation details to evade the ADD imposed in June 2024 on Chinese rock breaker imports. They allegedly rerouted consignments via Malaysia, secured forged certificates of origin, and declared significantly lower values. This allowed them to present the goods as Malaysian origin and pay lower duties. The mastermind of the network has been arrested; others including importers, agents, and buyers remain under investigation.

The probe was initiated after domestic manufacturers noted that hydraulic breakers of Chinese origin continued to flood the market at unusually low prices despite the duty imposition. Industry players had flagged the possibility of transshipment through third countries. In response, the DRI’s Ahmedabad zone launched a detailed investigation.

DRI officials say the network had two layers of deception: (i) rerouting via third countries to avoid detection, and (ii) gross undervaluation of consignments. In one example, products worth USD 10,000 were declared as having a value of only USD 2,000 to suppress the duty liability. Over 500 containers amounting to more than ₹2,000 crore had reportedly been moved via this route across major ports in Kolkata, Mumbai, and Gujarat in the last year.

Under the Customs Act, the accused have been booked under Sections 104(4)(b) and 104(6)(a). The DRI seized key consignments and documentation during the raids. For example, the Gandhidham unit arrested one principal operator, Rajiv Hosamane Jayaprakash (alias Rajiv Jain), on September 15, 2025.

Domestic manufacturers, such as Dozco India Pvt. Ltd. and ACE Pneumatics, have claimed serious adverse impacts from these illicit imports. The cheap imports undermined their competitiveness and disrupted planned investments and capacity expansions. The crackdown is seen as reinforcing the government’s “Make in India” and self-reliance objectives.

Comparative cases: ADD evasion in past

Evasion of anti-dumping or customs duties by transshipment and undervaluation is not new. In Tamil Nadu recently, DRI uncovered a similar scheme in Chinese‐made goods routed via Malaysia to dodge the ADD, involving undervaluation and false origin claims.

In another case, Surat businessmen were arrested for undervaluing walnut imports by routing invoices via UAE firms, evading customs duties of ₹5.6 crore.

Elsewhere, a Gujarat trader was apprehended for a ₹44 crore customs evasion in walnut imports from Chile. The operator had moved genuine invoices through a Dubai intermediary and replaced them with undervalued invoices.

These patterns expose how transshipment, forged certificates, undervaluation, and misuse of third-country routing remain preferred tools to circumvent trade remedy instruments.

Going forward, investigators may crackdown on the full chain of operators, finance flows, and forged documentation. The DRI may also expand the net to other suspected routes such as Vietnam or Southeast Asia. Domestic industry and tax authorities will use this as leverage to tighten scrutiny of origin claims and price declarations in sectors vulnerable to dumping.

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