Custom Clearance by Sister unit

[BRIJMOHAN GOYAL]

Sir,

We are manufacturing Power Plant equipment at different location . We are having one IEC Code with different Branch Code for each Unit. Your expert views are requested for :-

1. Unit X placed an order on Vendor A for import of raw material , LC also established by Unit X. now, as per LC terms , documents are in the name of unit X i.e. Invoice, packing list, B/L etc addressed to Consignee and notify party as address of Unit X and Purchase order is also issued by Unit X.
2. Now, our Unit Y ( under same IEC code with different Branch code) can file B/E in their name on the documents of unit X and take delivery .

Pl forward your views

[MUKUND THAKKAR]

Dear Brijmohan,

if company is same only you need to file the bill of entry under other branch code, please as per my view you convert this transaction in high sea sale to your other branch in under which branch you need the material than file the BE and make the transaction easily, second option is file bill of entry in same branch code and as and when you get the material clear as such to your required branch.

[YAGAY andSUN]

Dear All,

Sale to self is no sale. This is settled legal position.

Regards

YAGAY and SUN

(Management, Business, and Indirect Tax Consultants)

[Mahir S]

Sir,

Imported goods can be cleared by unit X by payment of duty and thereafter by making endorsement on the B/E, the said B/E can be endorsed in the name of unit Y, who shall be receiving the inputs, taking cenvat credit thereon and utilizing the inputs in the manufacture of goods.

Hence, unit X can endorse the B/E in the name of unit Y who shall thereafter be in complete possession of the B/E and the imported raw material.

AI Summary

Bill of Entry endorsement permits transfer of imported inputs between branches enabling receipt and cenvat credit by receiving unit. Imported consignments invoiced to Unit X under a common IEC may be delivered to Unit Y either by filing the bill of entry under Unit Y or by converting the transaction into a high sea sale so Unit Y clears the goods; alternatively, Unit X can clear on its BE, pay duty, and endorse the bill of entry to Unit Y, after which Unit Y takes possession and claims cenvat credit.