Valuation/Assessment Practice in respect of export of Iron Ore

CBEC has noti­fied Valuation/Assessment Prac­tice in respect of export of Iron Ore via Cir­cu­lar No. 12/2014 –Cus­toms on 17th Novem­ber, 2014

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.

3. 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.

© 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.

4. 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.

5. Dif­fi­cul­ties, if any, faced in the imple­men­ta­tion of this cir­cu­lar, may be imme­di­ate­ly brought to the notice of the Board.

6. Wide pub­lic­i­ty to this Cir­cu­lar may be giv­en by way of issuance of pub­lic notice.

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