Cbec Streamlines Valuation Procedures

The Central Board of Excise and Customs (CBEC) has said that special investigations by the special valuation branches (SVBs) of customs houses into related persons transactions, payment of royalty and licence fees and technical collaboration agreements would have to be cleared within three months of the registration of the cases.

The procedures have been streamlined in anticipation of enhanced inflow of foreign investments.

The CBEC has also reduced the extra duty to be deposited by the importer from 5 per cent to 1 per cent of the value of the goods. It has also said that the extra duty deposit will be discontinued in case no decision is given within four months of the registration.

The CBEC has, however, decided to limit the number of SVBs to four, which would be attached to houses in Chennai, Calcutta, Delhi and Mumbai.

The Board has directed that a single questionnaire (in place of the piece meal approach) will be sent to the importer directing him to furnish a reply within 30 days. The SVB will also be required to strictly adhere to the time period for finalisation of cases, irrespective of whether the importer has furnished the information or not.

The review of the SVBs was undertaken following representation from trade and industry demanding the winding up of SVBs. Their winding up was sought on account of the inordinate delay in settling investigations, which imposed an additional financial burden on the importer in terms of extra duty deposits.

The CBEC decided that SVBs should be retained on account of the role they would have to play during an era of enhanced capital goods imports. Instead, it was decided to streamline procedures and mitigate the harassment caused to importers.

Henceforth, cases will be referred to the SVB following specific approval from the concerned commissioner of customs. If investigations are required for imports coming in through customs houses other than the four authorised ones, the cases would be referred to any of the four customs houses after considering the importers request. The concerned customs house will forward the relevant files after following provisional procedures.

Investigations by SVB will not be ordered in cases where an importer is able to demonstrate that the goods under assessment have been obtained at the same price by unrelated buyers. Special investigations will also not be ordered where the importer is able to demonstrate that the price of the good approximates the transaction/deductive/computed value of identical/similar goods. In such cases, the assessment will handled by the assessment group.

However, if an importer is unable to satisfy the assessment officer following any of the above methods, the case could be referred to the SVB, provided there exists prime facie evidence that the relationship between the exporter and importer had influenced the price declared by the importer.