Ganapati Exports Faces Vabal Misuse Charges

The Department of Revenue Intelligence (DRI) is preparing fresh show-cause notices to be served to Ganapati Exports for suspected Vabal (value-based advance licence) misuse and misdeclaration of export items worth over Rs 100 crore.

The O P Agarwal-promoted company had been issued over 150 Vabals out of which the DRI has inspected only 23 such licences. One of the show-cause notices to be issued by the Delhi office of the DRI relates to advance licence misuse by the company to the tune of Rs 25 crore. The other notice being issued by the departments Delhi office to the company relates to misdeclaration of export items consisting mainly of plastic goods worth Rs 5.72 crore, which were earlier confiscated by the department at Kandla port of Gujarat.

 

According to sources, the departments Calcutta office is independently serving another show-cause notice to Ganapati Exports, again due to suspected misuse of Vabal to the extent of Rs 57 crore. The Calcutta office had earlier served a similar show-cause notice for the same economic offence to the tune of Rs 11 crore.

The DRI has already summoned O P Agarwal, promoter of Ganapati Exports, several times in connection with this case. However, Agarwal has not responded to these summons till now.

Meanwhile the Calcutta office of the Enforcement Directorate is believed to have also initiated an investigation against the Ganapati Exports group for not bringing back export proceeds which amount to Rs 20 crore.

Vabal misuse by the company comprises mainly of non-fulfilment of export obligations through massive over-valuation of exports of plastic oven sacks, suitcases, bags and other plastic items to Russia over the last couple of years. Ganapati Exports has paid only Rs 5.8 crore to the Customs for its total exports.

Ganapati Exports had been awarded star trading house status last year for its outstanding export performance, which was shown to be over Rs 1,500 crore.

Interestingly, two of its board members were senior bureaucrats, who are believed to have resigned after the directorate of revenue intelligence filed cases against the company.

One of them was former steel secretary Moosa Raza and the other was former Controller General of Accounts Ravi Katpalia.