Wimco Faces Cancellation Of Some Export Licences

According to a DGFT source, the company had sold items imported against the advanced licence scheme in the open market illegally.

Any sales can be done only after meeting the export obligations and obtaining necessary transferability and redemption sanctions.

In a face to face hearing before the DGFT on September 13 which issued a show cause notice on August 30, Wimco's management told the enforcing directorate that the error was purely technical and was sorry that the incident took place.

Even at the company's AGM held in Mumbai yesterday, chairman R G N Swamy told the shareholders that the error was a technical one.

 

A top official of the company reiterated: If at all we have erred then we view it as a technical slip. If a total picture of the exports of the company is taken then we have more than fulfilled our export obligations. However, if one goes on item to item basis, then our exports may fall short.

The Department of Revenue Intelligence, in the course of an enquiry, has found that Wimco had sold raw material imported against 21 duty-free advance licences in the local market for about Rs 21 crore, in contravention of section 11 of Foreign Trade (Development & Regulation) Act 1992.

DGFT sources pointed out that of the 30 cases of misuse of advance licences the company had fulfilled its export obligations in 20 cases, however the company never obtained the transferability and redemption sanctions to sell the products In the local market.

The duty claimed by DRI has been settled by the company. As per interim advice from the DRI, the company paid the directorate Rs 1.19 crore under protest and without prejudice to its rights and contentions, prior to and subsequent to the year end.

Though the DGFT is likely to take a lenient view keeping in mind the company's reputation and good track record, the company stands to lose some of its export licences.

In another case, the office of the Special Director of Enforcement, Mumbai, has levied a penalty of Rs 30 lakh on the company for non-realisation of certain export proceeds in respect of exports made during 1982-89.