New Delhi: The Directorate of Revenue Intelligence (DRI) has unearthed a luxury car smuggling racket involving the use of diplomatic privileges. ‘Operation Monte Carlo’ was launched after the DRI received information that a group of individuals were involved in smuggling high-end luxury cars into India in the name of diplomats and shipping it to private individuals, thereby making huge amounts of money. Customs evasion took place in Obligation.
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 classified under Chapter Head 8703 having duty structure of BCD – 125%, IGST – 28% and 12.50%. SWS. The net customs duty on import of cars is 204%. Notification No. 03/57 dated 08.01.1957 issued by the Government of India (as amended from time to time) provides exemption from customs duty on all imported goods to certain classes of members of diplomatic missions in India and their family members.
The manner in which it was traced was as follows – A Dubai-based man, who has been involved in previous customs offenses and has been investigated by the DRI, was the mastermind behind the racket. He will arrange for the import of luxury cars into India from countries like Britain, Japan and the United Arab Emirates in the name of diplomats. The actual buyers of the vehicles will be identified by the CEO of a popular chain dealing in the sale of pre-owned luxury cars. On arrival in India, these vehicles will be delivered directly to the buyer’s city or to the luxury car dealer. The domestic registration for these vehicles will be done at certain specified Regional Transport Offices (RTOs) in Maharashtra, Himachal Pradesh and Punjab. After completion of registration formalities, these cars, on which full customs duty was evaded at the rate of 204%, will be sold to Indian buyers, making huge gains at the cost of government revenue.
On receiving specific details of one such luxury car imported in the name of a Delhi-based diplomat from an African nation, DRI officials kept a careful vigil on the vehicle after its arrival at the port. Thereafter, the vehicle was loaded onto a transport vehicle and taken to a showroom in Andheri and put on display. The DRI officers followed the vehicle and kept a close watch on the entire car. In parallel, in a carefully planned pan-India operation in 7 cities, the premises of key persons involved in the racket were searched. A total of 6 cars have been detained under the provisions of the Customs Act, 1962. More cars have been identified and the process of tracing them is underway.
So far, 3 prominent people, including the CEO of a Gurugram-based luxury car dealership, have been arrested in this racket. More players of this racket are likely to be identified in the coming days in the investigation. It is estimated that over 20 luxury vehicles have been smuggled into India in the name of diplomats in the last 5 years, resulting in theft of duty worth more than Rs. 25 crores. The detection of this racket has thus helped in the detection of a serious fraud, thereby strengthening the ability of DRI to detect and combat unique and sophisticated methods of smuggling.
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