The Directorate of Revenue Intelligence (DRI) on Friday (July 16) arrested Nipun Miglani, CEO of Gurugram-based luxury car dealership Big Boy Toyz (BBT), along with Liyakat Bachau Khan and Suriya Arjunan. The three people were apprehended in a connection to a luxury car smuggling racket involving the misuse of diplomatic privileges. DRI has said the gang of people has been charged for a scam of importing 20 vehicles to India and evading tax of more than Rs 25 crore by using the names of various diplomats stationed in India.
Generally, importing a foreign-made vehicle (aka completely built unit or CBU) in India attracts heavy custom duties, and makes CBU models almost three times more expensive in the country. As per the Regulation of Customs Privileges Rules, 1957, an Indian citizen needs to pay a staggering 204% of net import taxes on the value of an automobile upon shipping it into India. However, international diplomats and their families living officially in India do not require to pay this customs duty on import of the vehicles.
Big Boy Toyz, the luxury car dealership for new and used vehicles, has fired Miglani with immediate effect after a public probe started in the luxury car smuggling racket. Moreover, the company has also denied any knowledge of the alleged racket.
In a press statement, BBT said, “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 and furhter also if any person deals with Mr. Nipun Miglani, he may do at his own risk and Big Boy Toyz ltd. has no concern with him. We also inform the public at large that any concern or query in the alleged matter, may not write to Big Boy Toyz as in no way Big Boy Toyz is involved in this.”
However, DRI is also investigating the role of the management in the scam. Many feel that without their knowledge, it’s difficult for CEO Miglani to do this.
DRI launched ‘Operation Monte Carlo’ after it received a tip-off that a group of individuals was involved in smuggling high-end luxury cars into India in the name of diplomats and thereby evading a huge amount of Customs duty. Moreover, the alleged group was said to sell the smuggled vehicles for the full amount including the tax that they never paid.
The DRI probe became official upon receiving specific details of one such luxury car being imported in the name of a Delhi-based diplomat of an African nation. The said vehicle after its arrival at the Mumbi port was loaded onto a transport vehicle and taken to a showroom in Andheri where it was placed for display. DRI officers followed the vehicle and kept a discreet watch over the car throughout the incident.
In a concurrent event, carefully planned search operations were carried out at the premises of the alleged key individuals involved in this racket, across seven cities in India. DRI, in the same process, detained a total of six cars under the provisions of the Customs Act, 1962. More cars have been identified and are in the process of being located.
The mastermind behind this racket is said to be a Dubai-based individual who has been investigated by the DRI even in the past for involvement in previous customs offences. He was responsible for the arrangement of import of luxury cars into India from countries like the UK, Japan and UAE, in the names of diplomats.
Then the potential buyers for the vehicles would be identified by the CEO (Nipun Miglani) of the popular chain dealing in the sale of pre-owned luxury cars. Once the vehicles reached Indian shores, they were sent straight to the city of the buyer or the dealer of the luxury cars.
These vehicles even got registered in different states like Maharashtra, Himachal Pradesh and Punjab. After registering the cars, they used to charge the full amount from the customers including the 204% Customs duty that they never paid to ensure massive profits on their parts.
DRI reckons that more than 20 luxury vehicles have been smuggled into India in the same manner, in the name of diplomats over the past 5 years, resulting in an estimated duty evasion of more than Rs 25 crore.