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Directorate General of Valuation Central Board of Excise & Customs Government of India

467/72/2001 Cus V Cir.No.27/2002

Circular No. :467/72/2001 Cus V Cir.No.27/2002 Dated : 21/5/2002

Valuation Checking Cell Creation of, in each Customs House to check under-valuation of sensitive commodities

Circular No. 27/2002-Cus. V, dated 21-5-2002

F. No. 467/72/2001-Cus. V

Government of India

Ministry of Finance (Department of Revenue)

Central Board of Excise Customs, New Delhi

Subject : Creation of Valuation Checking Cell in each Customs House regarding

Attention is drawn to the Joint Secretary (Customs)s D.O. letter of even number dated 25th September, 2001 (copy enclosed for ready reference) on the subject mentioned above. In the enclosed D.O. letter, all the field formations were requested to create aSeparate Valuation Checking Cellunit in each Customs House comprising officers of Appraiser rank to keep a check on under-valuation of sensitive commodities.

In view of above, I am directed to say that all the formations shall create aSeparate Valuation Checking Cellin each Customs House if not already done and initiate necessary action to review the undervalued consignments so that remedial action is promptly taken. The Valuation Cell will ensure the use of NIDB data by the assessing officers while assessing live consignments. The Cell will compile the data called for in Chairmans D.O. letter dated 27-12-2001 (copy enclosed for ready reference) and forward it to the jurisdictional Chief Commissioner, so that the aggregate Zonal Data can be sent to the Directorate of Valuation by 7th day of every succeeding month.

All the field formations are requested to take necessary action as desired and send a report to the Directorate of Valuation with a copy to the Board for information.



Copy of letter D.O.F. No. 467/72/2001-Cus. V., dated 25-9-2001

May I invite your attention to my D.O. letter of even number, dated 6-8-2001, wherein it was conveyed that in the revenue meetings taken by Secretary (R), the nature of checks on declared values being made by our officers had been discussed at length. It was mentioned in the letter that Customs Officers assessing imported goods should make intensive use of the valuation data circulated by the Directorate of Valuation as well as such data which is stored in the Customs computers. In this regard, detailed instructions had also been issued earlier in the Member (Cus.)s D.O. letter of even no. dated 17-1-2001 and during his visit to Mumbai Customs which were summed up in the tour note circulated to all Commissioners of Customs.

The need for 2. stricter check on valuation to stop leakage has been engaging special attention of FM and this issue was further discussed in the weekly meeting taken by Secretary (R) recently. It has been felt that there is scope to augment Customs revenue considerably by taking recourse to further measures to check under-invoicing effectively. It is very necessary that Asstt./Dy. Commissioner incharge of various Appraising Groups ensure careful checking of declared prices with contemporaneous price data of imports effected from different centres and that collected from various other sources. Board feels that apart from this scrutiny there should be an arrangement in every Custom House for an independent further check on prices being declared and accepted specially for sensitive commodities to guard against any consignments involving considerable under-declaration getting assessed based upon declared prices due to volume of work or lack of proper checks etc. in the assessment group. It has, therefore, been decided that a separate valuation checking cell may be created in each Custom House comprising of two officers of Appraisers rank. This cell should be fully equipped with valuation data provided by Directorate of Valuation as well as the data bank stored in the computer systems etc. The cell should have experienced officers, well versed about the prices of goods, and the sources for ascertaining reliable international prices. In the four major Custom Houses at Mumbai, Delhi, Kolkata and Chennai, this cell may be attached to Special Valuation Branch. In the remaining Custom Houses this may function under the supervision of any Addl./Jt. Commissioner, and should report every day results of checks carried out to Commissioner.

The proposed 3. valuation cell will have to be provided with appropriate computer terminal(s) so that they have simultaneous access to the Bills of Entry data which are being presented to any group whether already assessed or in the process of assessment. The officer in the cell should watch carefully the values of goods being declared especially for those commodities which are sensitive from the point of view of valuation. By making proper use of the valuation data furnished by DOV, that is already in the computer system for contemporaneous imports, etc., the cell is expected to identify consignments where prices declared areprima faciequestionable having due regard to information for identical/similar goods prices etc. If the assessment has already been done immediate further steps for reviewing the values demanding differential duty by way of issue of SCN etc. has to be initiated. Otherwise, remedial steps for loading of value before finalising assessment by the group should be taken to protect the interest of revenue.

The Ministry is also 4. of the view that one terminal should be provided to the DRI office at the same station as the Custom House so that the DRI officers can also maintain a watch on the ongoing process of assessment from valuation angle etc.

You are requested to 5. ask your officers to contact concerned officials of the Directorate of Systems and get a Read Only terminal which will have access to all the Bills of Entry being assessed in the Custom Houses. Similarly, arrangements may be made for extending one such terminal to the DRI office.

I shall be thankful 6. if feedback about action taken in the matter could be sent to the Board on immediate basis.

Yours Sincerely,


(P.C. JHA)


Copy of letter D.O.F. No. 467/83/2000-Cus. V(Pt.) Vol. VI, dated 27-12-2001

Attention is invited to Boards letter of even number dated 27-8-2001, wherein the format and time frame for report prescribed for under valuation of sensitive commodities was revised. It has been decided at the level of Chairman (CBEC) that henceforth the report should be sent by the Chief Commissioners to the Commissioner, Directorate of Valuation by the 7th of the succeeding month. The DOV, in turn, will compile/analyse the data and send a brief note to the Board on the amount of revenue realised by way of loading of valuation, by the 15th of succeeding month for which the report is due.

It is noticed that 2. despite emphasis laid on the report, the same is either not being sent on time or is sent after considerable time lapse. The time frame should be strictly adhered to and the report should be sent in the prescribed format with all the columns duly filled. The Board intends to keep the Government informed of the amount of revenue realised as a result of efforts made by the Department to curb under-valuation. In view of importance of the matter, I would request you to kindly ensure timely submission of the report to the Directorate of Valuation.

Yours Sincerely,

Sd/- (K.L. Verma)

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Tuesday, May 21, 2002