The Directorate of Revenue Intelligence (DRI) on Friday arrested three persons, including the chief executive officer of a Gurugram-based dealership in the sale of used luxury cars, for their alleged role in the smuggling of high-end vehicles into India in the names of foreign diplomats.
The accused have been identified as Liyakat Bachau Khan, Nipun Miglani and Suriya Arjunan. Six vehicles have been recovered so far.
The agency suspects that the syndicate brought over 20 luxury vehicles into the country in the past five years using the same modus operandi, leading to duty evasion of more than ₹25 crore. A DRI official confirmed that Mr. Miglani was the chief executive officer of Big Boy Toyz.
The racket has been unearthed as part of an exercise codenamed “Operation Monte Carlo”, following a tip-off that a group had been smuggling high-end cars in the names of diplomats and diverting them to private persons, thereby evading Customs duty, said the agency in a statement.
“Imports made by foreign diplomats and Missions in India are governed by the Foreign Privileged Persons (Regulation of Customs Privileges) Rules, 1957. Motor cars are classifiable under chapter heading 8703 having duty structure of BCD (Basic Customs Duty) — 125%, IGST (Integrated Goods & Services Tax) — 28% and 12.50% SWS (Social Welfare Surcharge). The net Customs duty on import of cars works out to 204%,” said the DRI.
However, the Indian government grants exemption from the Customs duty on all imported goods to certain classes of members of diplomatic missions in the country and their family.
The DRI found that a Dubai-based individual, who had earlier been probed by the agency for Customs offences, was the mastermind behind the racket.
“He would arrange for the import of luxury cars into India from countries like the United Kingdom, Japan and the United Arab Emirates in the names of diplomats. The actual buyers for the vehicles would be identified by the CEO of a popular chain dealing in the sale of pre-owned luxury cars. Upon arrival in India, these vehicles would be directly ferried to the city of the buyer or a dealer of luxury cars,” the agency said.
The domestic registration for the vehicles would be done in certain specific Regional Transport Offices in Maharashtra, Himachal Pradesh and Punjab. After completing the registration formalities, the cars — on which full Customs duty at the rate of 204% had been evaded — would be sold to the Indian buyers, thereby resulting in a huge profit.
The DRI received specific information about one such vehicle imported in the name of a Delhi-based diplomat of an African nation. A close watch was kept after it arrived at the port. The vehicle was loaded onto a transport vehicle and taken to a showroom in Mumbai’s Andheri and placed for display.
Agency officials followed the suspects. Simultaneous operations were conducted across seven cities and six cars were impounded. More cars have been identified and are in the process of being located, said the agency.
The probe may lead to identification of more accused persons in the coming days, the agency said.
Big Boy Toyz Limited, in a statement on Saturday, said it had terminated the services of Nipun Miglani, who was arrested by the Directorate of Revenue Intelligence for his alleged role in the smuggling of luxury vehicles.
The company, in its statement, said: “Mr. Nipun Miglani is terminated with immediate effect and Big Boy Toyz does not hold any liability and responsibility towards his alleged individual transactions...whatever Mr. Nipun Miglani has done in his individual capacity, Big Boy Toyz Ltd. is not liable for the same and further, also if any person deals with Mr. Nipun Miglani, he may do so at his own risk and Big Boy Toyz Ltd. has no concern with him.”
Jatin Ahuja, founder of Big Boy Toyz, said: “Big Boy Toyz, in last 10 years, haven’t been associated with any import or export of luxury cars. We only deal within India and as an organisation weren’t involved in any kind of illegal practices by Mr. Nipun Miglani via the organisation. Please note any illegal activities done by Mr. Miglani is carried on in his personal capacity.”
Mr. Ahuja said the organisation was not aware of Mr. Miglani's alleged acts. “...as soon as we were intimated about the same, we terminated his employment and association with the organisation effective immediately. Our legal team is also working towards taking the necessary actions,” he added.
