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Swiss security ink maker in ‘duty’ trouble

Swiss security ink maker in ‘duty’ trouble
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First Published: Wed, Aug 05 2009. 04 41 PM IST
Updated: Wed, Aug 05 2009. 04 41 PM IST
New Delhi: A Swiss company that supplies India a special ink for printing currency notes has run into trouble with security agencies for importing the ink using an allegedly rigged duty free licence.
The Directorate of Revenue Intelligence had last year seized about 450 kg of OVI Intaglio ink imported by SICPA, a leading provider of security inks and solutions for banknotes, on the grounds that the value of the ink far exceeded the value for which the duty free import licence was granted.
SICPA had legally acquired the licence from a rice exporter through a middleman. Exporters are allowed to import raw material worth up to 10% of their goods’ export value duty free.
Under the scheme of the Directorate General of Foreign Trade, the exporter was eligible to import jute bags, rope for tying the same and ink for marking the bags.
Sources said while the ink used for marking jute bags costs only about Rs30 per litre, the security ink imported using the licence usually costs over Rsone lakh per litre.
When contacted, a person from the firm’s Delhi office, who did not identify himself, said that the company “does not have any statement for the public. We will talk to the government only.”
An e-mail sent to the firm’s headquarters in Switzerland also remained unanswered at the time of filing the story.
SICPA, which also supplies the currency ink to Pakistan and the US besides a host of other countries, had got relief from the Adjudicating Authority (commissioner customs, exports), which had ruled that the firm did no mistake.
But, DRI last month filed an appeal and the matter has now reached CESTAT for further hearing.
“The rice firm had intentionally jacked up the quantity of the ink used in its application for licence which was later sold to SICPA by a middleman. The company then imported the specialised ink which is in violation of the spirit of the licence and the import duty laws,” sources said.
They said based on specific inputs, a DRI team had in May last year searched a godown in Okhla here and seized 150 kg of the ink valued at over Rs1.7 crore.
Based on initial interrogation, searches were also conducted at the Air Cargo Complex, from where another 300 kg of the ink valued at about Rs3.5 crore was seized.
The firm then had to pay a bank guarantee of over Rs17 lakh, indemnity bond of about Rs1.71 crore and provisional duty bond for Rs1.8 crore.
SICPA had earlier come under the scanner of the Intelligence Bureau after it was found that it was selling to Pakistan the same currency ink that was sold to India.
“The currency printing ink and papers are exported to Pakistan from European countries, similar to what is being given to India. We feel that a part of the consignment is being used by the ISI to print high quality FICN,” a source said.
On Monday, Cabinet Secretary K M Chandrasekhar chaired a high-level meeting that was attended by representatives from RBI, Intelligence Bureau, DRI, Enforcement Directorate, CBI, Central Economic Intelligence Bureau, the Customs and the paramilitary forces, among others.
It was decided at the meeting to take up the issue of fake Indian currency notes (FICN) with European countries, including Britain, which are exporting ink and currency paper to Pakistan from where most of the counterfeits originate.
Official sources said home secretary G K Pillai had briefed cabinet secretary K M Chandrasekhar about how Pakistan’s ISI is trying to destabilise the Indian economy by pumping in large amounts of FICN.
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First Published: Wed, Aug 05 2009. 04 41 PM IST
More Topics: Cuurency | India | Swiss | Ink | RBI |