1、SPECIAL VALUATION BRANCH (SVB)-Click here for the SVB Cases Disposed-What is Special Valuation Branch?Organizational StructureWho should register with SVBProcedure for Registration with SVBDocuments required to be submitted to SVBFinalisation of SVB casesProcedure for RenewalAppeal on the orders of
2、SVB1. What is Special Valuation Branch? Special Valuation Branch is a Branch of the Custom House, specialising in investigating the transactions involving relationship between the supplier and the importer and certain other special features like Technical Collaboration between the parties, etc. Spec
3、ial Valuation Branch examines the influence of relationship on the invoice value of the imported goods in respect of transactions between related parties. In respect of Technical Collaboration Agreements and Joint Venture Agreements, the terms and conditions of these agreements are examined to arriv
4、e at the conclusion, whether the existence of such agreement has influenced the invoice value of the imports.2. Organizational Structure Special Valuation Branch is headed by a Deputy Commissioner of Customs and assisted by one Appraising Officer and necessary Ministerial Staff. The telephone number
5、s of Dy. Commissioner and the Section are as follows:Deputy Commissioner (1st floor Room No.15) 2526 3653SVB Section (5th floor annexe) 2522 1918 Extn : 42213. Who should register with SVB Importers who are related to the supplier in terms of Rule 2(2) of the Customs Valuation Rules, 1988 are requir
6、ed to register with SVB. Rule 2(2) of the Customs Valuation Rules, 1988 is as follows:- Rule 2(2): For the purpose of these rules, persons shall be deemed to be “related“ only if:-i) they are officers or directors of one anothers businessesii) they are legally recognised partners in business;iii) th
7、ey are employer and employee;iv) any person directly or indirectly owns, controls or holds 5 per cent or more of the outstanding voting stock or shares of both of them;v) one of them directly or indirectly controls the other;vi) both of them are directly or indirectly controlled by a third person;vi
8、i) together they directly or indirectly control a third person;viii) they are members of the same family.Explanation I - The term “person“ also includes legal personsExplanation II- Persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole co
9、ncessionaire, however described, of the other shall be deemed to be related for the purpose of these rules, if they fall within the criteria of this sub-rule.Apart from the above, those who are having Collaboration Agreement, Technical Assistance Agreement or any other agreement / contract with the
10、foreign supplier are also required to register with SVB.4. Procedure for Registration with SVB The procedure for registration/finalisation is given in CBEC Circular No.11/2001-Cus dated 23.02.2001, issued as PN 68/2001 dated 02.04.2001 by Custom House, Chennai. All those importers who are having rel
11、ationship with the suppliers as mentioned in para 3 above or those who are having Technical Collaboration, etc., shall furnish a declaration about the relationship in the GATT declaration form at the time of filing of Bill of Entry in the Appraising Group. On examination of the circumstances of sale
12、 and keeping in view the invoice value of identical or similar goods, the group will make a reference to Special Valuation Branch for further investigation of influence of relationship on assessable value. If the importer is able to furnish evidence of the transaction value of identical or similar g
13、oods in respect of sales to unrelated buyers in India at the same price, then there is no need for any reference to Special Valuation Branch and the Bill of Entry will be assessed finally based on those contemporaneous import values. If there are no contemporaneous imports, and there is no way to co
14、mpare the values at the time of assessment of the Bill of Entry, then a reference is made to Special Valuation Branch. This reference is to be done with the prior approval of the Commissioner of Customs. If the importer can substantiate with documentary evidence that his invoice price is not influen
15、ced because of the relationship, there is no need for any reference to Special Valuation Branch. The Special Valuation Branch of that major Custom House, (out of the four - Chennai, Calcutta, Delhi and Bombay) which is located proximate to the Head or Corporate Office of the importer (having special
16、 relationships etc. with the suppliers), would handle the investigation into valuation of such importer. No application or representation to the Special Valuation Branch directly by the importers will be considered. All references shall be made through the Appraising Groups at the time of filing of
17、the Bill of Entry. On receipt of the reference from Appraising Groups, the case is registered in Special Valuation Branch and a PD Circular for provisional assessment is issued. Copies of the same are issued to the importer and to the Appraising Groups as well. The importer shall indicate the PD Cir
18、cular No. at the time of provisional assessment of all their imports in the Appraising Group and execute PD Bond with 1% Extra Duty Deposit on the assessable value of the goods. Along with the PD Circular a questionnaire is also issued to be filled up by the importer along with the list of all docum
19、ents required to be submitted. The amount of extra duty deposit presently kept at 1% will be continued. Board has however decided that if the importer does not furnish complete reply to the questionnaire within 30 days of receipt of the Questionnaire by the importer, the extra duty deposit will be i
20、ncreased to 5% till the date of receipt of reply by the Department. The importers falling under the related category may keep ready all the documents along with the replies to the questionnaire, etc., at the time of first import itself, so that the case can be finalised as early as possible in the S
21、pecial Valuation Branch.5. Documents required to be submitted to SVB The importer is required to submit replies to the questionnaire to the CBEC Circular No.11/2001-Cus dated 23.02.2001 (issued as PN 68/2001 dated 02.04.2001) and furnish all the documents listed in Annexures thereto. Proforma of the
22、 questionnaire given below. Click here to download the copy of the questionnaireReplies can be furnished to the same without waiting for the receipt of questionnaire from the department. All the columns in the questionnaire shall be filled up without fail. Wherever, the reply is nil or where the que
23、stion is not applicable to the importer, the same shall be specifically stated instead of leaving the column blank. The importer shall also furnish all the documents mentioned in the annexure. If the documents listed in the annexure are not existing or not applicable to the importer, the same shall
24、be specifically stated. All the pages of the questionnaire shall be signed by the importer or his authorised signatory with name and designation of the person signing them.The Annexure A should be issued by the assessing group, dealing with particular imports, to the importer soon after it is decide
25、d to refer the case to a SVB. Any importer to whom the questionnaire is issued should be instructed to furnish the reply to the referring Custom House as well as to the SVB of the concerned major Custom House within 30 days of receipt of the questionnaire. The questionnaire should be issued by the C
26、ustom House referring the case to the SVB. Traders who are importing the goods and selling the same in the same condition as they are imported shall furnish the invoice value, landed price, and their selling price in the Indian market. The difference between the selling price and landed cost shall b
27、e properly explained.6. Finalization of SVB cases On receipt of replies to questionnaire and other documents, the SVB will examine the same and call for any other additional information that is required. Upon receipt of reply to the questionnaire within the prescribed time limit, the SVB will decide
28、 within 7 days whether the importer has replied to the questionnaire substantively. Otherwise, immediate further information not furnished will be sought before taking step for finalisation of investigation. After furnishing of all the informations, the importer may, if they so desire, appear for pe
29、rsonal hearing and explain their case with regard to the acceptance of transaction value or otherwise. Thereafter, an Order - In- Original will be issued by the D.C.(SVB) and the same will be intimated to the importer by registered post and copies will be endorsed to all the Appraising Groups. Where
30、 provisional assessment is being resorted to the investigation and finalisation of the assessment must be completed within four months from the date of reply. If no decision is taken within 4 months, the extra duty deposit should be discontinued and the concerned DC/AC will be held responsible for i
31、nexplicable delay in finalisation. Once the case is finalised by the Special Valuation Branch, the provisional assessments pending in the Appraising Groups will be finalised and the extra duty deposit paid at the time of provisional assessment will be adjusted in accordance with the SVB order. In al
32、l cases of loading, it is mandatory for the importer to quote Order in Original No. of SVB and indicate the percentage of loading at the time of filing of each Bill of Entry by them.If they do not quote the Order No. and the loading factor, it will be construed as misdeclaration on the part of impor
33、ter and dealt with in accordance with the provisions of Customs Act. Please click here to view the full list of cases registered in 1990-2000 and finalised as on 01.05.2001. Please click here to view the full list of cases registered in 2001 and finalised and pending for finalisation as on 01.05.200
34、1. 7. Procedure for Renewal Normally, the order issued by the SVB is in operation for a period of 3 years.The order by SVB is passed based on the replies / documents furnished by the importer. If there is any suppression of fact or misdeclaration on the part of importer, necessary penal action will
35、be taken separately in accordance with the provisions of law.If the importer is having continuous imports over a period of time extending beyond 3 years, he has to file replies and documents at least 3 months before the completion of 3 years, so as to take up the renewal of the case. If there is no
36、change in the terms and conditions of the agreement, or pattern of invoicing, the same shall be specifically stated by the importer in the form of an affidavit. On examining these documents, the SVB order issued in the past will be renewed for a further period of 3 years. If there are no imports fro
37、m the related supplier beyond a period of 3 years, there is no need for renewal of the circular and the file will be closed in SVB.8. Appeal on the orders of SVB In all cases where the importer is aggrieved by the order passed by SVB, he may file an appeal to Commissioner of Customs (Appeals), 5th F
38、loor, Custom House, Chennai, against that order. This right of appeal is also indicated in the preamble attached in the order in original.ANNEX - AQuestionnaire to be filled by importers who are related to the foreign suppliers.1 Name of the importer with full address of the Head or Corporate office
39、, registered office administrative office / factory and PAN No.2 Whether the importer is a proprietorship/partnership/private limited company/public limited company/branch office of company incorporated outside India.3 (a) Name of the foreign supplier from who the goods are imported (b) nature of th
40、e business relationship of the importer with the supplier (eg., subsidiary company/branch office/distributor/agent/indentor or any other) (c) nature of the transaction - eg., sale to the importer, consignment sales, branch transfer or any other.4 Whether any officer or director in the company/firm o
41、f the importer holds any office in any company incorporated outside India; if so, whether such a company is related to / associated in any way with the supplier of the imported goods. Also give details of converse situation, if applicable?5 Whether the importer and the supplier of the goods are part
42、ners in business?6 Whether there is an employer-employee relationship between the importer and the supplier of the imported goods and vice versa?7 Whether the foreign supplier or any of their associated companies jointly or severally, directly or indirectly own, control or hold equity shares worth %
43、 or more of the total paid up capital of your company or any of your associated companies?8 Whether any other third person, jointly or severally, directly or indirectly owns controls or holds equity shares worth 5% or more of the foreign supplier and of your company including the associated companie
44、s? 9 (a) Whether the supplier of the goods is in a position, directly or indirectly, to exercise restraint over you, legally or operationally, in any manner? (b) Specify the role if any, of the supplier or any of its associate business entities, in your corporate policy, design specification, qualit
45、y control, marketing, sub-licensing of patent, franchise, etc? (c) Whether any legal liabilities created by contracts or agreements entered into by the supplier devolve on the importer?10 Whether the importer is in a position, directly or indirectly, to exercise restraint over the supplier, legally
46、or operationally, in any manner? Details as per (b) and (c) above for this converse position?11 Whether a third party is in a position, directly or indirectly, to exercise restraint over both the importer and the supplier of imported goods, legally or operationally, in any manner? Details as per (b)
47、 and (c) of (9) above for this converse position?12 Whether the importer and the supplier of the imported goods, together, are in a position, directly or indirectly, to exercise restraint over you, legally or operationally, in any manner? Details as per (b) and (c) of (9) above for this converse pos
48、ition?13 Whether the importer and the supplier of the imported goods are members of the same family?14 (a) Whether the importer is a sole agent, distributor or indentor appointed by the foreign suppliers. (b)Give the full particulars of all the suppliers of goods from outside India for whom the impo
49、rter acts as agents/distributors/indentors? 15 Whether the importer is a branch or subsidiary of the supplier of the importer goods? (The word subsidiary has the same meaning as in section 4 of the Companies Act)16 (a) Whether the importer is engaged in the local manufacture of any products of the suppliers of the imported goods? (b) If yes, whether the imported items are used in such manufacture? (c) If yes, whether the imported items are manufactured or exclusively supplied by the suppliers? (d) Whether the product manufactured by the importer using the imported goods is sold under a
