Ambani yacht ‘flounders’ on customs duty

A luxury yacht chartered by a subsidiary of the Reliance-Anil Dhirubhai Ambani Group (R-Adag) that was seized by Indian customs earlier this year will not be released until Rs28 crore customs duty is paid in full and a bank guarantee of an additional Rs15 crore is provided by the firm, a senior customs official said.

The luxury yacht named Tian, purportedly a gift for Tina Ambani from her husband, R-Adag promoter Anil Ambani, was seized in February by the central intelligence unit of the customs department in Mumbai following a probe that began in January. The customs official mentioned earlier, who declined to be identified because the matter has not yet been resolved, said the yacht had been seized “due to non-payment of duty. It was illegally brought to India and was used without paying duty.”
“Till now the department has received a draft of Rs25 crore from a representative of R-Adag,” the same official told Mint. “The investigation is still on and the department will release the yacht once the dues are recovered.” The department has also asked R-Adag to deposit a bank guarantee of Rs15 crore before it releases the yacht. The official said this was routine procedure pending a probe with the bank guarantee serving as collateral for any penalty that could be imposed.
The customs department has alleged that the yacht’s final destination according to its shipment papers was Colombo, Sri Lanka; it was to be unloaded at Mumbai from where it was to sail to Colombo.

According to the department’s investigation, the Tian was purchased in mid-2008 from an Italian yacht maker by Ammolite Holdings Ltd, a Channel Islands-based associate firm of Reliance Capital Ltd and brought to India on 31 October under a charter agreement with Reliance Transport and Travels Pvt. Ltd, an R-Adag company. The Channel Islands are located off the French coast of Normandy.
Reliance Transport and Travels later took permission from port authorities to park the yacht in Mumbai for a few days before it sailed to Colombo. The customs department has alleged that the yacht did not leave for Colombo for over three months and was instead being used in India without paying duty. Duty is usually paid at the destination—in this case, Colombo.

Another customs official familiar with the case and who also did not want to be identified alleged that Tina Ambani had taken the yacht to Goa during New Year celebrations. However, in its reply to the customs department, Reliance Transport and Travels has claimed that the yacht sailed to Goa to test a repaired generator in late December 2008 and returned on 2 January.

In response to Mint queries, an R-Adag spokesperson said: “We have already communicated our stance to the concerned authorities.”
The funds for the charter came from a Singapore-based firm, Gateway Net Trading Pte Ltd. Ammolite Holdings, according to the customs official mentioned in the first instance, is a small firm with “share capital of $100,000 (Rs50.4 lakh today),” while Gateway Net Trading is an associate firm of Reliance Communications Ltd, also an R-Adag company.
In a letter to the customs department dated 18 February 2009, Ammolite Holdings and Reliance Transport and Travels have denied evading customs duty. In the letter, which has been reviewed by Mint, Ammolite Holdings said: “The yacht was duly and validly brought into Indian waters in compliance with all laws and regulations with the permission of the customs department.”
Ammolite Holdings and Reliance Transport and Travels have also said the Rs25 crore paid was a voluntary deposit “to demonstrate bonafides and to avoid any unwarranted or unpleasant consequences”. The two firms have also requested the department to release the yacht and refund the money.
The yacht—a Custom Line 112 Next, 34m flying-bridge fibre glass vessel—has been valued at about Rs100 crore by customs authorities. A July 2008 report in this newspaper had estimated the price of the yacht at Rs200 crore.

source:http://www.livemint.com/2009/04/21234138/Ambani-yacht-8216flounders.html?h=B