Star Motors was fined $41,850 in Magistrates' Court yesterday for falsely declaring the value of its cars to Customs inspectors.

The dealership avoided $900,000 in duty - just three years after it began business.

John Bento, Star's principal owner, pleaded guilty to importing 279 BMW, Rover and Citroen vehicles with falsified invoices between January 1999 and March of 2000. Acting Senior Magistrate Carlisle Greaves fined the business $150 for each count, and Bento agreed to pay the fine the same day.

Crown counsel Vinette Graham-Allen told the court that many of the documents had been prepared on Star's behalf by an exporter overseas, who sold the vehicles to Star. Because Bento signed the documents, he was required to answer the charges.

Although most car dealers would not comment on the case, one executive at a competing dealership explained that importers can reduce their duty obligations by asking the exporter to reduce the declared value of the car while increasing nondutiable charges, such as shipping and commission. The importer pays the exporter the same amount for the product, but the cost of duty is less.

"Traditionally, the policy is you pay duty on the ex-factory value of the vehicle," the executive said. "In his instance, the ex-factory cost was, in my estimation, significantly undervalued, and all of the additional costs were put into those portions which are nondutiable."

Defence counsel Mark Pettingill said his client was not responsible for exporters undervaluing their products. "Our position is you are dealing with a lot of people, so you are not going to be looking into the cost breakdown," Mr. Pettingill said.

"You are going to say 'oh, that's a good deal'," he said.

But the applicable legislation, drawn in 1898, "puts an onerous responsibility on the head of the company (who) signs off on things..." he explained.

"It's a very strict law and there is no excuse you can really make if you've signed off on anything."

Before Mr. Greaves decided on a fine, Mr. Pettingill told the court that Bento "is a gentleman of impeccable character".

"The buck is stopping with him," he said, "and he has been fully cooperative."

Mr. Pettingill was pleased with the Magistrate's sentence, which was less than a third of the maximum penalty of $480 per count or $133,920 for all 279 offences.

Collector of Customs Winifred Fostine-DeSilva said her department became suspicious of the declarations and launched an investigation two years ago. "You know what the norm is, so you can compare (with other imported cars)," she said. "We find out the true value of the good."

Ms Fostine-DeSilva said that last year, there were 155 cases of duty evasion settled and $108,100.52 was collected in penalties, in addition to the duty and wharfage importers may have been trying to avoid. During Ms Fostine DeSilva's one year term, the case of Star Motors has been the only one which involved too much money to be handled internally, and was sent to court.

In June 1998, Bento left the Holmes Williams and Purvey group after 31 years, the last few as general manager. In October that year he opened Star Motors, which now sells Daewoo and Maruti cars, in addition to BMWs, Rovers and Citroens.