ANNEXURE

Statement in reply to Lok Sabha Starred Question No.*418 for Answer on 21-02-2014:

(a),(b)&(c) : Yes,  the Government is aware of attempts by some importers undervaluing foreign goods for evading Customs Duty and has a mechanism in place to detect such cases.

            Details of cases of undervaluation detected by Customs field formations and Directorate of Revenue Intelligence (DRI) for the last 3 years and the current year (upto January) are as under:

Customs field formations:

Directorate of Revenue Intelligence ( DRI):

(d)& (e):          Yes, the Customs Department including DRI have issued Show Cause Notices to demand Customs duty evaded and initiated adjudication proceedings for imposing fine and penalty as per the provisions of Customs Act, 1962. The details of show cause notices issued to the offending firms after completion of investigation are given in the above table at part (a),(b)&(c). Further, to enable the field officers to detect undervaluation and to have  proper valuation of goods the following remedial steps have been taken: 

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1.      The Directorate General of Valuation (DGOV) under the CBEC assists the Board (Central Board of Excise & Customs) in Policy matters on Customs Valuation by developing valuation tools (including databases) and by adopting the best practices for the effective and uniform application of customs valuation law.

2.      The DGOV maintains National Import Data Base (NIDB) which is a comprehensive electronic data base of imported goods involving compilation of import data on a daily basis from all Customs stations in the country and its analysis is made by specially developed software. The combined, analyzed data is transmitted to all Customs stations for checking under valuation. In cases, where the studies reveal potential undervaluation, Alert Notices are issued to field formations.

3.      The Risk Management Division (RMD) under the Directorate General of Systems, CBEC runs the Risk Management System. All valuation alerts received from DGOV are inserted in RMS in the form of Targets with the specific instructions to the officers to check the under valuation.

4.      The DGOV also monitors valuation trends of sensitive commodities and provides guidance to field formations for checking undervaluation of imported goods so as to prevent leakage of Customs revenue.  It also provides data for valuation corridor under RMS (Risk Management System). The declared value is assessed by the proper officer in the light of valuation alerts and as per valuation rules. Suspected cases of under valuation are referred for investigations or suo-motto taken up by the investigative agency. 

5.      Apart from above, the Directorate General of Revenue Intelligence (DRI) also analyses and prepares list of sensitive commodities and the field formations are sensitized to detect cases of undervaluation in respect of such sensitive commodities by issuing General Alerts and Modus Operandi Circulars.

6.      Upon detection, investigations are conducted and show cause notice for differential duty and for imposing fine and penalty are issued, and process of adjudication as per law is followed.

7.      In some cases, offenders are arrested as per provisions of the Customs Act, 1962 and guidelines issued thereunder. In appropriate cases, the duty evaders are subjected to prosecution.