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Government of India
Ministry of Finance
Department of Revenue
Central Board of Customs & Excise
Circular No. 12/2014 -Customs
Room no. 49, North Block, New Delhi - 110001
Dated 17th November, 2014
To
Chief Commissioners of Customs (All),
Chief Commissioners of Central Excise and Customs (All),
Director General, Directorate General of Revenue Intelligence,
Commissioners of Customs (All),
Commissioners of Central Excise and Customs (All).
Madam/Sir,
Subject: Valuation/Assessment Practice in respect of export of Iron Ore
The Board has received references relating to the valuation of iron ore entered
for export. The matter has been examined.
- 2. It has been reported that Iron ore, by its nature, undergoes a change
in moisture and Fe content with the passage of time including during
transport. The iron ore is tested both at the load port and at the port of
discharge for ascertaining its quality and price. The commercial contracts
governing its sale, often, contain provisions to adjust the amount payable
depending upon the test report at the port of discharge. It is also reported
that exporters present provisional invoices at the time of export since
prices are to be finally determined after tests at discharge port.
- The matter has been examined. In order to bring in uniformity,
transparency and consistency in assessment of export of Iron Ore, fines and
pellets, it has been decided that the following procedure shall be adopted
by all Custom Houses:
(a) When a consignment is entered for export of iron ore, fines or pellets,
samples shall be drawn in the presence of Customs by following the procedure
laid down by the Bureau of Indian Standards for drawal of samples of Iron
ore, fines and Iron ore pellets and sent for testing.
(b) The declared value of the export goods, shall be scrutinized in relation
to the provisional invoice, contract, weight, price, etc., by the proper
officer in terms of the provisions of Section 14 and the Customs Valuation
(Determination of Value of Export Goods) Rules, 2007 and the Shipping Bill
may be provisionally assessed. In case of the transaction being declared or
found to be between related parties, procedures governing related party
transactions shall be followed.
(c) Upon receipt of the load port test report and discharge port test report
the proper officer shall compare the two reports with the terms set out in
the contract. Where variations in the two test reports are within tolerance
limits provided in the contract and do not impinge upon the declared price,
the proper officer may proceed to finalize the provisionally assessed
shipping bill in terms of the provisions of Section 14 and the Customs
Valuation (Determination of Value of Export Goods) Rules, 2007.
(d) In cases where the load port test report and discharge port test report
show a variation, so as to impinge upon the price, the proper officer shall
proceed to re-determine the value of the goods in terms of Customs Valuation
(Determination of Value of Export Goods) Rules, 2007. In no case, shall a
price based upon the average of the two test reports be accepted for the
purposes of arriving at the assessable value.
(e) In cases where the transaction is being declared or is found to be
between related Parties, while the above procedures will continue to be
followed, the finalization of assessments shall be done by following
instructions governing the investigation of such cases by SVBs.
(f) The Custom Houses will ensure that the shipping bills are finally
assessed within 30 days of the receipt of all documents. However, this time
limit shall not apply to cases under investigation for related party
transactions, which shall be governed by the circular relating to
investigations by SVBs.
- The Custom Houses shall monitor receipt of Bank Realisation Certificates
for the purposes of comparison with the final invoices submitted by the
exporter to satisfy the accuracy of assessed values.
- Difficulties, if any, faced in the implementation of this circular, may
be immediately brought to the notice of the Board.
- Wide publicity to this Circular may be given by way of issuance of public
notice.
Yours faithfully,
(Satyajit Mohanty)
Director (ICD)
F. No. 465/8/2013 – Cus V
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