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Customs New SVB Branch at Bangalore-reg.

Customs - 86/2010 - Dated:- 10-12-2010 - OFFICE OF THE COMMISSIONER OF CUSTOMS C.R. BUILDINGS, QUEEN'S ROAD, BANGALORE - 560001 C.No. VIII/48/202/2010 Cus Tech Date: 10-12-2010 PUBLIC NOTICE NO. 86/2010 Sub: Customs - New SVB Branch at Bangalore-reg. Pursuant to the Central Board of Excise & Customs, New Delhi s approval vide letter F.No.465/13/2010-Cus V dated 21-09-2010, for establishment of a Customs Special Valuation Branch (SVB) at Bangalore to function as an investigation unit with .....

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th effect from 1st December 2010. The said SVB shall be headed by the Additional Commissioner of Customs, Air Cargo Complex, Bangalore. The functions of the SVB, its organizational structure, etc., are detailed hereunder for information of the trade and industry. 3. What is Special Valuation Branch? Special Valuation Branch is a Unit of the Customs Commissionerate/formation, specializing in investigating the transactions involving relationship between the supplier and the importer and certain ot .....

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ational Structure Special Valuation Branch will be headed by an Additional Commissioner of Customs and assisted by a Deputy/Assistant Commissioner of Customs, Appraising Officers, Executive Officers and necessary Ministerial Staff. 5. Who should register with SVB? At present, Rule 3(3)(a) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and Rule 3(2) of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007, provides that the transaction value .....

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the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf : Provided that such transaction value in the case of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brokerage, enginee .....

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related, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section : Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under sect .....

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Section 14(1) of the Customs Act, 1962, are required to register with SVB. Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007/Rule 2(1) of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007, reads as follows:- For the purpose of these rules, persons shall be deemed to be "related" only if:- i) they are officers or directors of one another's businesses; ii) they are legally recognized partners in business; iii) they are .....

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who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, 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 foreign supplier are also required to register with SVB. However, 1%EDD shall not be insis .....

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ut the relationship in the WTO declaration form at the time of filing of Bill of Entry in the Appraising Group. On examination of the circumstances of sale and 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 goods in respect of sales to unrelated buyers in India at the .....

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e that his invoice price is not influenced because of the relationship, there is no need for any reference to Special Valuation Branch. The Special Valuation Branch at Bangalore, would handle the investigation into valuation of such importers. 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 the Bill of Entry. On receipt of the reference from Appraisin .....

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lled up by the importer along with the list of all documents required to be submitted. The amount of extra duty deposit at present kept at 1% will be continued. The 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 increased to 5% till the date of receipt of reply by the Department. The importers falling under the related category may keep rea .....

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d 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 question 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 .....

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eceipt of the questionnaire. The questionnaire should be issued by the Custom 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 be properly explained. 8. Finalization of SVB cases On receipt of replies to questionnaire and other documents, the SVB will exam .....

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heir 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 provisional assessment is being resorted to the investigation and finalization 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 .....

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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 importer and dealt with in accordance with the provisions of Customs Act. 9. 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 impo .....

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xamining these documents, the SVB order issued in the past will be renewed for a further period of 3 years. If there are no imports from 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. 10. 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), Bangalore, against that order. This right of appeal is also indicate .....

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should be downloaded in coordination with the Nodal Officer and Systems Manager (EDI) for uploading on the intranet on a monthly basis. Encl: Questionnaire and List of documents to be Submitted Sd/- (B. BHATTACHARYA) COMMISSIONER ANNEXURE - A Questionnaire to be filled by importers/exporters who are related to the foreign supplier/purchaser Sl. No. Particulars 1 Name of the importer/exporter with full address of the Head of Corporate office, registered office, administrative office/factory and .....

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any other 4 Whether any officer or director in the company/firm of 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/exporter and the supplier/purchaser of the goods are partners in business? 6 Whether there is an employer-employee relationship between the importer/exporter and the supplie .....

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any including the associated companies? 9a) Whether the supplier/purchaser 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/purchaser or any of its associate business entities, in your corporate policy, design specification, quality control, marketing, sub-licensing of patent, franchise, etc? c) Whether any legal liabilities created by contracts or agreements entered into by .....

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orter/exporter and the supplier/purchaser of the imported/export 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 position? 13 Whether the importer/exporter and the supplier/purchaser of the imported/export goods are members of the same family? 14a) Whether the importer is a sole agent, distributor or indentor appointed by the foreign suppliers? b) Give th .....

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er the imported items are manufactured or exclusively supplied by the suppliers? d) Whether the product manufactured by the importer/exporter using the imported goods is sold under a trade mark, design or patent owned or controlled by the supplier/purchaser of the goods or any person related to them? 17 Whether the imported goods are component parts in the SKD/CKD condition for local assembly into finished goods? If yes, furnish a complete list of items imported in CKD/SKD condition. 18 In the c .....

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goods for engineering, development, art work, design work and plans and sketches undertaken elsewhere than in India and connected with the production of imported goods? b) Are any services rendered by or on behalf of the importer relatable to this? 21 Particulars in respect of transactions in intangible property: Has the importer/exporter entered into any international transaction(s) in respect of purchase/sale/use of intangible property such as know-how, patents, copyrights, licences, etc with .....

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the goods covered under an agreement? Are there other agreements between the importer and the supplier/exporter and purchaser? If yes, list them. 23 What is the basis of arriving at the price in the invoice? Is it a) Price list with discount b) Net discounted price c) Quotation d) Transfer price or e) Other (please specify) 24 Do the suppliers of the imported goods supply the same directly to any other person in India? If so, please furnish the prices at which these imports are made, with suppo .....

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er of the imported goods. 28 Furnish the full details of amounts, if any, received by the importer in the form of agency commission, overriding commission or any other remuneration received either from other importers in India or from the supplier of the imported goods. 29 Expenses incurred by the importer on behalf of the supplier, by understanding or agreement with, or under instructions from the supplier of the imported goods, eg. advertising, propaganda expenses or any other expenses for the .....

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ills of Entry 3 Specimen copy of invoices for import of identical, similar or connected goods by this part through the present importer 4 Specimen copy of invoices for import of identical, similar or connected goods by a company associated with the importer 5 Commission note and credit notes in case of amounts received from outside India 6 Annual report of the importer's business concern for last three years 7 Pricelists for import and sale of the imported goods. 8 Statement regarding percen .....

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ED IN CASE OF SUBSIDIARIES/HOLDING COMPANIES AND THOSE WHO HAVE COLLABORATION AGREEMENT OR SIMILAR AGREEMENTS Sl.No. Document to be submitted 1 Collaboration agreement, Joint Venture Agreement and other agreements with the supplier of the imported goods or with any other person acting for the supplier 2 Approval of Government of India/RBI to the agreement, if any 3 Statements for last three years duly certified by the Chartered Accountant, containing the following informations:- i) CIF value and .....

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