The Hindu Business Line : FERA cases against ITC dropped

THE Enforcement Directorate, New Delhi, in an order passed recently, has dropped all proceedings initiated under the provisions of erstwhile FERA 1973 (since repealed) against ITC Ltd and its current (only Mr Y.C. Deveshwar), and 7 former directors and a senior executive, in relation to show-cause notice number 21.

Sources said the directorate in its order had observed that the "question of any culpability in terms of Section 68 of FERA 1973 does not appear to arise in so far as the notice is concerned, hence the charges against all individual noticees also fail".

According to ED, the company has been in regular correspondence with RBI in the matter of realisation of export proceeds. It is only one of the umpteen number of show-cause notices (as many as 25, it is learnt) that have been issued by ED against the company for different alleged violations, and many more are still under adjudication.

According to ED sources, hearings in at least three more notices are expected to begin soon, and the entire batch of show-cause notices against the company are expected to be disposed of within the next 6-8 months. The matter has been dragging on since 1996.

The charge against the company under the said show-cause notice was for alleged failure to realise export proceeds to the tune of $8,35,596 (around Rs 3.78 crore) on account of 4 (GR) forms attributable to export of India Virginia tobacco to ITC Global Holdings pte Ltd, Singapore in 1996.

The ED, sources point out, has clarified that the said export transactions were well covered by the general and/or special permission of RBI and/or Central Government, and that there was no contravention of Sections 18(2) and 18(3) of FERA 1973.

According to ED, these coupled with extension of time granted by RBI till September 30, 2003 for realisation of export proceeds have helped in the dropping of proceedings.

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