Valuation of imported goods

[Rajesh Kumar]

Sir/ Madam

An importer imports motor scrap containing for example 10% copper. Now department calculation value of imported scrap by mathematical calculation for examples total Value with taxes/ total weight *10% which comes about ₹ 300/kg as purchase cost whereas party selling the said copper after extracting from motors and using manpower at the rate of Rs. about 150/ kgs.

In this process the ITC is also getting accumulated.

Is department can make a case of under valuation of goods ?

Please enlight all angles from party and department side.

[Shilpi Jain]

Query is not very clear. However, under Customs also the department has to first reject the valuation adopted and then apply the valuation rules in sequential manner to arrive at the taxable value. They cannot adopt any means as such to value the imported goods.

[Raghunandhaanan rvi]

Sir,

Generally, the customs department may reject the declared value if they have evidence of contemporaneous imports or material evidence to charge of undervaluation. If you disagree with the decision of the department on the value enhancement and charge of undervaluation, you may insist issuance of speaking order and appeal against it before the appellate forum.

In the meantime, you may request the department to allow clearance of goods provisionally subject to execution of PD bond with a bank guarantee for disputed duty value. This is my view.

AI Summary

Valuation of imports must follow sequential customs rules; provisional release with bond and appeal remedies are available. Valuation of imported mixed-content goods must follow sequential customs valuation rules: the department may reject the declared value but cannot use arbitrary mathematical apportionment and must apply statutory valuation methods; value enhancement requires contemporaneous import or material evidence of undervaluation. Importers may request provisional clearance subject to a provisional duty bond or bank guarantee, insist on a speaking order, and pursue administrative appeals against valuation determinations.