TMI Blog1993 (4) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... Y J. -The appeal is preferred against the judgment of the Delhi High Court (see [1978] 114 ITR 753) allowing the writ petition filed by the second respondent, M/s. Ferro-Alloys Corporation Ltd. The writ petition was directed against the judgment and order of the Government of India, Ministry of Finance, dated September 19, 1973, in an appeal preferred under paragraph 9 of the Tax Credit Certificate ( Exports ) Scheme, 1965. The second respondent is the manufacturer-exporter of ferro-manganese and chrome concentrates. During the year 1964-65 (from February 28, 1965, to June 5, 1965 ), the second respondent entered into a number of agreements with the foreign buyers for the sale of the aforesaid two commodities. The export was routed throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne contract of sale between the local supplier and the M.M.T.C. and another contract of sale by the M.M.T.C. to the foreign buyer on principal to principal basis. The foreign exchange so generated under this arrangement was the basis for issue of import licences, which were issued in the name of the M.M.T.C. with the letter of authority in favour of the bartering firm or the local supplier, as the case may be. This enabled the bartering firm/local supplier to import the approved commodity under its approval barter and thus be in a position to recoup the losses incurred by it in arranging the supply of - or in supplying, as the case may be of export commodities to the M.M.T.C. It was agreed and understood that Ferro-Alloys should intimate th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such sale proceeds." A reading of the sub-section shows that the tax credit certificate is issued to the person " who exports any goods or merchandise out of India after the 28th day of February, 1965, and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act, 1947, and the Rules made thereunder." The question, therefore, arose who is the person, in the case of this transaction, who can be said to have exported the goods and received the sale proceeds in the shape of foreign exchange ? The matter was taken in appeal before the Government of India under paragraph 9 of the Tax Credit Certificate (Exports) Scheme, 1965. On an elaborate consideration of the bartering scheme and the several documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erable are endorsed immediately on receipt in favour of the exporter by the Corporation and the sale proceeds are directly realised by the exporters through their bankers and the commission of the Corporation agreed to is paid by the exporter to the Corporation. The declaration under section 12 of the Foreign Exchange (Regulation) Act in Form GR-1 contains the name of the Corporation as the exporter. But the form lists the name of the exporters' banker as the banker concerned. " In other words, the High Court's approach was that while for external appearances, the Corporation was given out as the exporter, Ferro-Alloys was the real exporter for all purposes and it was Ferro-Alloys which earned and received the foreign exchange. The M.M.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory documents, viz., G.R.I. Form pre scribed under the Foreign Exchange Regulation Act, 1947, and the shipping bill prescribed by the Customs Act were made out in the name of the M.M.T.C. showing it as the exporter. We have perused the Form-G.R.I. Column-I pertains to exporter's name. Against this column is shown "Minerals and Metals Trading Corporation of India Limited". The form contains a declaration to be signed by the exporter declaring that he is the seller/consignor of goods and a further undertaking that they will deliver to the bank mentioned in the said Form, the foreign exchange resulting from the export of the goods mentioned therein. It was signed by the M.M.T.C. Letters of credit were opened in the name of the M.M.T.C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed long after the relevant transactions were over and evidently to buttress its case with respect to the tax credit certificate. Not much significance can be attached to it, also because it is in the teeth of the contracts signed by the foreign buyer with the M.M.T.C. with respect to the very same goods. It is also pointed out that some of the documents required to be executed according to the system of barter were not actually executed between the parties. May be so. The fact yet remains that the entire export was done through the M.M.T.C. in accordance with the system of barter. There is no half-way house ; either it is the barter system or it is not. This is an undisputed fact as are the several statutory documents made out in the name o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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