Customs show cause to WSFL

MUMBAI, Dec 9: The Customs Commissioner (Preventive), Mumbai, has issued a show cause notice (SCN) to Wall Street Finance Ltd (WSFL), and 11...

MUMBAI, Dec 9: The Customs Commissioner (Preventive), Mumbai, has issued a show cause notice (SCN) to Wall Street Finance Ltd (WSFL), and 11 others under various sections of the Customs Act, 1962 for a case of alleged smuggling of foreign currency outside the country.

The case was detected by the Directorate of Revenue Intelligence (DRI) in May 1997, and has been now taken over by the Customs for adjudication. The DRI had earlier won an important case in the Bombay High Court relating to seizure of pay orders connected with the transactions under investigation.

The alleged smuggling was detected when DRI officers intercepted a vessel `Ya Hajipir’, carrying onions to Dubai, and the foreign currency including travellers cheques (TCs) worth Rs 1.44 crore were found concealed under the cargo.

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The investigation revealed that foreign currency worth Rs 13.9 crore in TCs which had been obtained through Wall Street Finance Ltd and its sub-agent, Time Travel and Cargo (TTC), were allegedly smuggled out to the Middle East. The recipients were identified as Salim Dady, Dost/Dosa, and one DD, suspected to be associates of the notorious gold smuggling syndicates of Dubai. The amount is identified from transactions during a period of two months.

The modus operandi used by TTC, owned by one Riyaz Retiwala, was to use forged and stolen passports to fill in BTQ forms and Purchase Agreement Forms to issue TCs. Two persons who dealt in a big way with TTC have been questioned by the DRI. One of them, Iqbal Mohammad Hussein Kapadia would in turn, hand over the currency to others, who acted for one Zahoor, based in Dubai. Zahoor was allegedly in touch with Kapadia over the phone and would arrange for the smuggling out of the currency.

TTC dealt with these persons and paid WSFL through cheques or pay orders by money deposited by TTC with its bankers on receiving cash in Indian currency here.

WSFL had, in turn, an agreement with Arab Financial Services, Bahrain, (AFS) for holding and transacting TCs of Visa brand of AFS.

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The DRI won a major order from the Bombay High Court recently, when the confiscation of two pay orders of TTC in favour of WSFL by the department was challenged by WSFL.

The total amount involved was Rs 68 lakh which TTC had issued on 28 May 1997 (three days after Ya Hajipir was seized) in lieu of cheques it had earlier issued to WSFL which had bounced. DRI’s counsel, M I Sethna, argued that the amount was seized in the reasonable belief that it constituted proceeds from the sale of TCs smuggled out of India. Therefore, the DRI was within its right in the action under Section 110 of the Customs Act.