Customs Consultancy Services

We provide the complete consultancy services for all majors Ports of Customs across the Country, especially in Delhi NCR & Mumbai.

We offer the following services with Customs: -

• Registration of Licenses with Customs / Duty Drawbacks/Refunds
• Liasoning with Customs for Verification & Registration of FMS, FPS, MLFPS, MEIS, SEIS, Advance Authorizations, EPCG Authorizations, DFIA and all Import Licenses.
• Cancellation of Bond with Customs executed against Advance Authorizations/ EPCG Authorizations. )
• Claiming of Duty Drawback Refund under Sec 74 & 75 of Customs Act, 1962.
• 4% SAD (Special Additional Duty) refund from all major Custom Port.
• 1% EDD (Extra Duty Deposited) against related party transaction.
• Fixation of Brand rate of Drawback

Special Valuation Branch (SVB)

The ‘Special Valuation Branch’ (SVB, for short) is an institution specializing in investigation of transactions involving special relationships and certain special features having bearing on value of import goods. SVBs are located only at five Custom Houses, i.e., Chennai, Kolkata, Delhi, Bangalore and Mumbai and any decision taken in respect of a particular case in any of these Custom Houses is followed by all other Custom Houses/formations.

We, offer the services for Finalization of SVB Order with New Custom House, IGI Airport New Delhi.

• Co-ordination with the customs department and clients for arranging the inputs required for preparation of application.
• Filing of Annexure-A with Custom Authority,
• Issuance of the SVB Order from the customs department for related party.
• Revalidation of SVB Order from the Custom Department
• Assessment of provisional bill of entry and get finalized with Customs.
• Closure of PD Bond executed with the customs department
• Refund of 1% EDD (Extra Duty Deposited) in Customs Department

DETAILED BACKGROUND ON SVB:-

The Special Valuation Branch (hereinafter referred to as “SVB”) investigates the transactions involving between the importer and the related foreign supplier. In other words, when the parties are related as per Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (Valuation Rules), then the valuation of goods as imported from such related foreign suppliers is investigated and/or examined by the SVB.

2 In this regard, detailed instructions were issued vide Circular Nos. 01/98-Customs dated 01.01.1998 and 11/2011-Customs dated 23.02.2001 which prescribed the procedure for referring the cases to SVB and the timelines involved therein.

• P The SVB was taking humungous time in finalizing the SVB investigations. Due to such delay in finalization of SVB matters, the importers had to suffer by way of paying Extra Duty Deposit (EDD) while filing of provisional Bills of Entry with the Customs Department.
• The Trade and Industry represented such delays before the concerned authority. After considering the same, the Central Board of Excise & Customs (“CBEC”) decided to streamline the procedure relating to investigations by SVBs.

The Special Valuation Branch of that Custom House, which is located proximate to the Head or Corporate Office of the importer (having special relationships etc. with the suppliers), handles the investigation into valuation of such importer. Wherever in the declaration prescribed under the Customs Valuation (Determination of Value of Imported Goods), Rules, 2007 (hereinafter referred to as "Valuation Rules, 2007"), the importer has himself made an averment that the transactions are between related persons in accordance with Rule 2(2) of the Valuation Rules, 2007, and there is a, prima facie, justification for further enquiry, the concerned case of import is referred to the SVB of the concerned Custom House, where a separate case file is opened and a registration number is assigned to the case. Similar reference to SVB to look into valuation on account of special relationship can be ordered by Commissioner concerned where such relationship comes to light on any intelligence or while enquiring into transactions of any importer with a particular supplier.

A prima facie case exists for investigation by the SVB where the importer is not able to provide evidence to the effect that the price has not been influenced by the relationship or where the importer is not able to demonstrate that the price for the said goods closely approximates to one of the following values ascertained at or about the same time –

(i) the transaction value of identical goods, or of similar goods, in respect of sales to unrelated buyers in India;

(ii) the deductive value for identical goods or similar goods; and

(iii) the computed value for identical or similar goods.

Apart from investigation of special relationship case, SVB also handles more complicated cases of additions to declared transaction value as stipulated under Rule 10 of the Valuation Rules. No reference to SVB is necessary where any additions are sought to be made under Clauses (a) and (b) of Rule 10(1). However, where the additions sought to be made are considered to be in the nature of ‘royalty and licence fee’ under Rule 10 (1)(c), or where the value of any part of proceeds of any subsequent resale, disposal or use of imported goods accrues to the seller [Rule (10)(1)(d)] or where any other payments are made or are contemplated to be made in future by buyer to seller as a condition of sale of imported goods etc., [ Rule 10(1)(e)], the case may be referred to the SVB after following the provisional assessment procedure.  

All cases to be registered in the SVB for special investigation should be with the specific approval of the concerned Commissioner of Customs.

Where the imports requiring investigation by SVB are noticed in a Custom House or Customs formation other than Chennai, Kolkata, Delhi, Bangalore or Mumbai Custom House, all the relevant records should be forwarded to the SVB of the concerned Custom House that would take up the investigation of the case after following the provisional assessment procedure.  

Latest Circulars Issued by Central Board of Excise & Customs:-

• CBEC has comprehensively revised the instructions for the examination of related party transactions. In this regard, the following circulars have been issued by CBEC:
• Circular No. 04/2016-Customs dated 09.02.2016 providing procedure for renewal of SVB orders and ongoing SVB inquiries under Circular No. 11/2001- Cus dated 23.02.2001
• (ii) Circular No. 05/2016-Customs dated 09.02.2016 providing procedure for investigation of related party import cases and other cases by SVBs
• It is relevant to mention here that Circular No. 04/2016 is relevant only for such cases which are pending for renewal and ongoing SVB inquiries under Circular No. 11/2001- Cus.
• However, Circular No. 05/2016 provides comprehensive procedure for afresh cases where imports are made from the related foreign suppliers. The SVB procedure to be followed is laid down as under

 Assessment under the new circulars: -

The plight of the importers associated with the prevalent practices led to passing of Circular 4 and Circular 5. Briefly, the process for investigation by SVBs prescribed under Circular 5 is as follows:

• At the time of filing the bill of entry the importer shall provide information outlined in Annexure A of the circular to the concerned customs officer who shall thereafter proceed to determine the need for investigation by SVBs. Within 3 days of receiving the information, he shall submit preliminary findings to the concerned Commissioner of Customs ("Commissioner").
• After assessment of the preliminary findings, the Commissioner can direct either reference of the case for investigation by SVB along with a provisional assessment of goods, in parallel, or finalization of the customs duty assessment or assessment in terms of Rule 3 of the Rules by the concerned officer without any SVB investigation;
• Reference to SVB shall not be made for import of samples and prototypes, exempted goods (where no duty is charged or charged at nil rates) and goods whose value does not exceed INR 100,000 (USD 1,471)9. Additionally, SVB investigation is mandatory for transactions involving payments towards royalty and license fee or where proceeds of a subsequent resale, disposal or use of the imported goods accrue to the seller or if the condition of sale involves future payments to the buyer.
• For cases where SVB investigation has been directed, the concerned customs officer shall seek relevant information and documents from the importer in a questionnaire (Annexure B of the circular) while continuing with the provisional assessment of the imported goods;
• The importer must furnish its reply to the concerned SVB within sixty (60) days from the receipt of questionnaire. Upon failure to do so, the importer is granted a further period of sixty (60) days to reply and while no EDD is levied, a security deposit at the rate of 5% of the assessable value is imposed. The security deposit, which can be given through cash deposit or a bank guarantee, is applicable for three (3) months and must necessarily be discontinued thereafter. After expiry of this period, the SVB can only resort to the Customs Act to obtain necessary replies from the importer.
• After receiving the importer's reply, the SVB shall commence inquiry and may seek further information as needed. The investigation must be completed within 2 months of receiving the importer's reply or, after obtaining an extension from the Commissioner, within 4 months thereof;
• Upon completion of its investigation, the SVB shall submit its findings to the Commissioner for approval. After the approval has been granted, the SVB shall send an investigation report to the concerned customs officer for finalizing the provisional assessment. The report must contain relevant facts, importer's submissions, investigative findings, grounds for acceptance/rejection of the transaction value declared by the importer and extent of the influence of the importer's relationship with the foreign supplier on the value;
• If the findings of the report indicate that the transaction value conforms to Rule 3 of the Rules, the provisional assessment must be finalized accordingly. However, if the value is found to have been influenced by circumstances surrounding the sale, a show cause notice is sent to the importer and an adjudicating authority is appointed; and
• The adjudicating authority shall pass an order quantifying the extent of influence of the declared transaction value and the provisional assessment shall be finalized accordingly. The said order, unlike previously, shall remain applicable till change, as maybe declared by the importer, in the terms and conditions of the import in case of which a fresh reference shall be made to the SVB for investigation. Thus, no renewal is necessary under the new law.

Considering the wait for transition to the new regime, Circular 4 provides for treatment of pending cases till such time. It provides that in all pending SVB investigations, EDD is to be discontinued after receipt of the necessary information and documents from the importer or with immediate effect if they have already been provided. Further, for all matters pending renewal, importers are required to provide further information indicating whether or not there is a change in the terms and conditions of the imports. In case there are changes, SVB shall initiate fresh inquiries in terms of Circular 5 and if not, then EDD is to be discontinued immediately and concerned authorities must finalize the ongoing provisional assessment.