Don’t buy CDs abroad, seedy local shop could be better

The US Customs had seized 58 titles over the past few months and found copyrights violated in 16 titles (16,000 pieces) of the Gus and the Cyberbus. The US customs also gave the first leads about lakhs of pieces of other titles like Ultimate gambler, 3D Mania, Golden Years of Independence, and International Cook Series lying dumped in warehousers in Carlstadt, New Jersey.

The DRI has, in turn, confirmed that the sub-standard consignments were lying unsold for the past two years in warehouses in New Jersey. Two consignments of 4.7 lakh and 2.4 lakh pieces belonging to Multisync and Indam Marketing respectively, have been identified.

Further investigations revealed that these very consignments were exported by Padmini Polymer Limited, which had allegedly indulged in frauds against the Duty Entitlement Pass Book (DEPB) scheme. Thirty Indian companies, including Padmini Polymer, have already been booked in the scam in which fraudulent exports of over Rs 150 crore have already been traced. The Indian companies committed gross over-invoicing and shipped out pirated poor quality CD-ROMs while availing the 20 per cent export incentive offered by the Government in 1997. The incentives were withdrawn last year once the CD-ROM scam was detected.

The Ministry of Finance has been told about the clinching evidence provided by the US Customs and the link of the seized material with the DEPB fraud. In its report to the Ministry sent last week, the DRI has stated, “It is very clear that the CD-ROMs were highly overvalued in order to obtain higher DEPB credit. The prevailing wholesale price for most CD-ROMs exported were $3.50 to $ 7.50 per piece, which were exported for $20 -$25 per piece. A case of over valuation is certainly established…”

The report also names Padmini Polymer Limited (PPL) as the company which, in turn, sold the CD-ROMs to six more companies which misused the DEPB scheme and exported CD-ROMs to the US, Singapore and Dubai. The sale value of the CD-ROMs was Rs 163 crore and the DEPB involved, Rs 37 crore. In the case of the Ultimate

series, exported by two Ahmedabad-based companies, Crown International and Subhalaxmi Exports, while the declared value of the CD-ROM was $18, investigations revealed that the correct value was only $2 per piece (the price offered by the US copyright holder.)

The trail of Indian-made CD-ROMs to Dubai and Singapore proved to be a circuitous one since the defaulting companies re-imported the defective goods back. Exports carried out to Singapore by Aries Systems and Services were subsequently despatched to Dubai and then brought back to India by another company Contessa Commercial. DRI’s investigations show that the Dubai exporters, M/S Gulf Software had declared a value of Rs 1.8 crore to Dubai Customs for eight consignments imported by Contessa. However, the Indian importer declared the value as Rs 25.5 crore, thus over-invoicing it by nearly Rs 23.5 crore.

In the case of one Aries consignment of 4.2 lakh pieces (mostly of games) worth Rs 32 crore, too, the DRI has concluded that the CD-ROMs were “pirated and the price grossly inflated.” Inquiries conducted by the Indian High Commission in London revealed that the consignment was later sold to Singapore. The Indian mission in Singapore has now been asked to trace two companies in Singapore to uncover this strain of the ballooning CD-ROM scam.