The Chennai zonal unit of the Directorate General of Central Excise Intelligence has investigated and discovered Cenvat credit fraud involving Rs. 2,500 crores done by 16 insurance companies and car manufacturers in Chennai.
These insurance companies have been involved in providing motor-vehicle insurance policies by misusing Cenvat credit on fradulent accounts and bills of the car dealers.
From the investigation done on this case, it was found that the car manufacturers appoint the insurance companies as preferred car insurance companies( PICs) as part of a common agreement between both the parties and instruct their car dealers to sell their respective insurance policies to PICs only for commission where in car dealers get 15 to 45% benefit and car manufacturers get roughly 3%.
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