Recourse options in valuation rules

Last week's column on The problem with Customs valuation law highlighted the International Chamber of Commerce's concern on Customs misuse of the valuation database to set reference or minimum prices, collecting duties on that basis.

Many readers have written about their experience and asked how to deal with Customs when they resort to these or to methods not formally permitted under the valuation law.

It is difficult to give a single prescription, but, in most situations, the importers would benefit by filing a bill of entry before arrival of goods. Section 46 (3) of the Customs Act allows an importer to do so 30 days before expected arrival of the vessel or aircraft or vehicle by which the goods are being brought for import.

The importer can then attend to Customs queries before the goods arrive, avoiding the pressures and anxieties about demurrage.

Upon filing the bill of entry, the appraising officer may raise a query.

The law requires the officer who doubts the truth or accuracy of the declared value to inform the importer of the grounds for doing so. At the importer's request, this information must be given in writing.

The importer should not fail to demand this and then reply. If not well conversant with the subject, he must take suitable professional help.

The importer can ask for a personal hearing and take the help of a professional to represent his case. He must insist on a speaking order and not consent to arbitrary loading of value by Customs.

He must get familiar with the Central Board of Excise and Customs (CBEC) circular 16/2003-Cus dated March 17, 2003, that asks for speaking orders to be passed in all cases and 91/2003-Cus dated October 14, 2003, that dispenses with this requirement when the importer consents to assessment at higher value.

Thereafter, if the adjudication order enhances the value, an appeal should be filed, taking professional help, if necessary.

Meantime, if the goods arrive, the importer can seek provisional assessment and immediate release of goods, via CBEC circular 22/2004-Cus dated March 3, 2004.

If, in a rare case, the assessing officer cannot release the imported goods, arrangements can be made to shift these to a Customs warehouse under Section 49 of the Act, so that these do not incur demurrage.

CBEC circular 84/95-Cus, dated July 25, 1995, says for this purpose, the cargo can be removed from the container that can be then released for use by the container agents or other importers.

If the assessing officer refuses to follow the CBEC circulars, the matter can be taken to higher-level officers or the courts.

If the goods are so urgently required that the importer wants to clear these on duty payment and agitate the matter afterwards, he can pay under protest.

In sum, Customs valuation law and departmental instructions do give an importer some options. Familiarity with these can make one feel less helpless.

tncrajagopalan@gmail.com