To evade tax, luxury cars imported in name of ‘diplomats’
The Directorate of Revenue and Intelligence (DRI) on Friday busted a luxury cars smuggling racket involving the misuse of diplomatic privileges, with the arrest of three persons, including Nipun Miglani, a senior executive of Gurugram-based luxury car dealership, Big Boy Toyz, people familiar with the matter at the agency said.
DRI said in a statement that the accused imported around 20 luxury cars such as Range Rovers and Prados over the past five years in the name of diplomats, and then sold them, evading duty of at least ₹25 crore.
A Dubai-based man, who has been involved in Customs rackets in the past and has been probed earlier by DRI, is behind the entire racket but he is yet to be caught, the statement added.
According to the statement, upon receiving specific details of one such luxury car imported in the name of a Delhi-based diplomat of an African nation, DRI launched an operation codenamed “Operation Monte Carlo” and kept discreet watch over the vehicle after its arrival at the port. It found that the vehicle was loaded onto a transport vehicle and taken to a showroom in Andheri (Mumbai) where it was displayed.
Subsequently, it carried out searches across seven cities and recovered six luxury cars.
Detailing the modus operandi used by accused, DRI said “a Dubai based mastermind would arrange for import of luxury cars into India from countries like the UK, Japan and the UAE, in the names of diplomats.”
The actual buyers for the vehicles would be identified by Miglani. “Upon arrival in India, these vehicles would be directly ferried to the city of the buyer or a dealer of luxury cars. The domestic registration for these vehicles would be done in certain specific Regional Transport Offices (RTOs) in Maharashtra, Himachal Pradesh and Punjab. After the registration formalities were completed, these cars on which full Customs duty @204% was evaded would be sold to the Indian buyers, thereby making a huge profit at the cost of government revenue,” the DRI statement added.
Founder and managing director of Big Boy Toyz Jatin Ahuja told HT that his firm has fired Miglani as the CEO with immediate effect and a police complaint is also being filed against him to secure the interests of the company.
“We absolutely have no idea about what Nitin Miglani was doing in his personal capacity beyond office hours but Big Boy Toyz has not role in it and not a single customer of the company has been affected (by his activities). We were totally unaware of this,” Ahuja said.
He added that BBT is not into the business of importing cars.
A statement by Big Boy Toyz said, “Mr. Nipun Miglani, an employee of the organisation... conducted certain transactions thereof in his individual capacity & without the knowledge and consent of the management of Big Boy Toyz. Mr. Nipun Miglani is terminated with immediate effect & BIG BOY TOYZ does not hold any liability and responsibility towards his alleged individual transactions. It is made known to the general public at large that whatever Mr.Nipun Miglani has done in his individual capacity, Big Boy Toyz Ltd. is not liable for the same.”
Apart from Miglani, DRI has also arrested Liyakat Bachau Khan, an employee of the Dubai -based mastermind, and Suriya Arjunan, a Bengaluru based financier who used to fund the purchase of vehicles before they were transferred to private persons in India, said an official who didn’t want to be named.
DRI said that imports made by foreign diplomats and missions in India are governed by the Foreign Privileged Persons (Regulation of Customs Privileges) Rules, 1957. The net customs duty on import of cars works out to 204% but the law exempts certain classes of members of Diplomatic Missions in India and their family members from duties on all imported goods.
The agency said the “investigation is likely to identify more players of this racket in the coming days”.
“It is estimated that more than 20 luxury vehicles have been smuggled into India in the name of diplomats over the past 5 years, resulting in duty evasion of more than ₹25 crore,” the statement added.