Patil, in his letter a year back, had asked for the case to be re-opened and resurrection of the excise team which was disbanded by the excise department's top brass. The aggressive MP is contemplating, along with some other MPs, to demand a CBI enquiry against senior excise officials for obstructing the investigations. Patil's letter hints at a possibility that RK Patel & Co, which has evaded excise duty to the tune of Rs 5 crore, is merely the tip of an iceberg. The firm sells its jarda under the brandname ``Patel Jarda-Cow Brand.'' The chances are all jarda manufacturers located aroundNashik may have adopted a similar modus operandi.

Jarda is an item that figures in the peak rate list of the excise tariff and the duty is levied at the rate of 50 per cent (40 per cent basic and 10 per cent additional). According to finance ministry sources, jarda is also among the top four items where excise evasion is the largest.

The law requires that while clearing any consignments of branded jarda from the factory, manufacturers are required to print serial numbers on the cartons. While clearing these cartons from the factory premises, the manufacturers are required to raise invoice in which the serial numbers printed on the cartons are listed and excise duty is paid before the goods are despatched from the factory.

According to sources, RK Patel & Co floated bogus firms and opened bank accounts at Amalner Urban Cooperative Bank Ltd. Incidentally, one of the close associates of the owners of the firm is also on the board of this bank, sources claims.

This was the modus operandi adopted by RKPatel & Co. For instance, consignment A bearing serial no 1A to 100A was despatched from factory after excise paid invoice was raised on the bogus firms. The goods are then transported to dealers of the firm. While effecting delivery of the finished goods on the strength of excise paid invoice, the transporter is also handed over a single copy of a delivery challan which is raised by the bogus firm. This delivery challan is thereafter destroyed and payment is made in cash.

Sources said that on delivery of the goods the delivery challan and the original excise paid invoice were both returned to RK Patel & Co which immediately destroyed the single copy of delivery challan. Finally, payment for the goods delivered was collected invariably in cash and the dealer in turn pays the amount in cash directly to the parent company.

The second step. Consignment B was despatched but the serial number was same as that of consignment A -- 1A to 100A. This time the bogus firm prepares only the delivery challan and goodsdespatched. In case of an excise enquiry while the goods are being transported, it is claimed that the goods were excise-paid consignment which were now being traded by the bogus firm. In support, the previous excise paid invoice is presented which matches with the serial numbers mentioned in the invoice. This invoice is used for multiple clandestine clearances and in the final stage payment is made by cheque to the bogus firm as invoice is in its name.

This method known as ``one-plus-one'' or ``one-plus-two'' was used in the operations. Effectively, the firm paid excise duty only on one consignment and clandestinely delivers multiple consignments without paying excise duties thus causing loss to the exchequer. Reportedly, scores of firms in the jarda business use a similar method to hoodwink the excise departments.

The case was brought to the notice of the central excise department by the estranged brother of the firm. According to the complainant, who floated another firm, his business was affectedbecause the irregular clearance by RK Patel & Co made it possible for them to sell goods cheaper and capture the market.

Several officers of the department turned a Nelson's eye when this illegal activity was brought to light. It is now clear that in last five years the firm had evaded duty to the tune of Rs 5 crore.