Valuation of Goods cleared in DTA by EOUs – CBEC Clarifies
VALUATION of goods cleared from an EOU for sale in DTA, when actual sale transaction does not take place at the time of clearance but on a subsequent date. In such cases 100% of the goods are cleared from the EOU to depot from where the sale is effected through consignment agents. CBEC has earlier issued Circular No 268/85-CX.8 dated 29.09.1994, clarifying that valuation of goods in such situations will have to be done in accordance with the Rule 8 of the Customs Valuation Rule (Determination of Price of Imported Goods), 1988 as it existed then.
Board has re-examined the issue and realised that in terms of the Customs Valuation Rules (Determination of Price of Imported Goods), 2007, the value will have to be determined by sequential application of Rules 3 to 9.
Board also relies on the following cases:
Endress Hauser Flowtec (I) Pvt Ltd. -
Morarjee Brembana Ltd.
Uniworth Textile Ltd.
In view of the position prevailing under Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and the decisions of tribunal on the subject earlier Board Circular No 268/85- CX.8 dated 29.09.1994 on the subject is withdrawn.
Board wants the field formations to follow the provisions of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 in such situations.
What is the big difference? They are anyway required to follow the 2007 Valuation Rules and not the 1988 Rules. Only Board forgot to withdraw its earlier circular. And now the Board doesn't say which exact Rule is to applied in sequential application of Rules 3 to 9.
The question is – goods are cleared from the EOU to the depot and sold from there. What is the value? Either you have the answer or you don't.
The unwanted apostrophe - a little better English please. The Subject of the Board Circular reads as “Valuation of Goods cleared in DTA by EOU's.” Why an apostrophe there? It looks like a signboard by an illiterate shopkeeper – CD's for sale!
CBEC Circular No. 933/23/2010-CX., Dated: August 16, 2010