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The ‘Special Valuation Branch’ (SVB, for short) is an institution specialising 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. Detailed procedure is laid down in Board's Circular No.05/2016 dated 09.02.2016.
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 –
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.