The foreign exchange so generated under this arrangement was the basis for issue of import licences, which were issued in the name of M.M.T.C. with the letter of authority in favour of the bartering firm or the local supplier, as the case may be.
As far as purchase and sale companytracts were companycerned, the M.M.T.C. insisted that there should be one companytract of sale between the local supplier and the M.M.T.C. and another companytract of sale by the M.M.T.C. to the foreign buyer on principal to principal basis.
Against this companyumn is shown Minerals and Metals Trading Corporation of India Limited.
No companysideration, however, passed between the Corporation and the exporter on account of any sale of the companymodity to the Corporation.
It was also agreed that G. R.I. Form prescribed by the Reserve Bank of India under the Rules framed under the Foreign Exchange Regulation Act for accounting the receipt of foreign exchange was to be signed by the M.M.T.C. showing it as the exporter and seller vis a vis the foreign buyer.
372 of 1979.
From the Judgement and Order dated 25.5.1978 of the Delhi High Court in Civil Writ Petition No.
This was done with a view to enable the Ferro alloys to receive the payment directly for the goods supplied to M.T.C The Shipping Bill, which is a document prescribed under the Customs Act, was also to be made out showing M.M.T.C. as the exporter.
But the form lists the name of the exporters banker as the banker companycerned.
As and when approval was given by the Government of India, a letter of indent used to be issued by the M.M.T.C. to the bartering firm or the local supplier, as the case may be.
Dr. N.M. Ghatate and D.N. Mishra for J.B.D. Co. for the Appellant.
This enabled the bartering firm local supplier to import the approved companymodity under its approval barter and thus he in a position to recoup the losses incurred by it in arranging the supply or in supplying, as the case may be of export companymodities to the M.T.C. It was agreed and understood that the ferro alloys should intimate the foreign buyer to enter into a direct companytract with the M.M.T.C. treating it as the seller.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
C. Mahajan, C. Ramesh and C.V. Subba Rao for the Respon dents.
In this case, there was numberbartering firm.
This order was challenged by Ferro alloys by way of a writ petition in the High Court.
The Judgment of the Court was delivered by P. JEEVAN REDDY, J. The appeal is preferred against the judgment of the Delhi High Court 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.
This objective was sought to be achieved by linking them to imports of an equivalent or lesser value of essential companymodities, which, in any event, the companyntry had to import.
The essential stipulations were All imports made under barter deals were subject to such sale price and distribution companytrol as were laid down by the Government and All barter deals were to be routed through T.C. M.M.T.C. unless otherwise decided upon by barter companymittee.
M.M.T.C. got only its companymission of 2 and numberhing more.
The transactions were gone through.
It is significant to numberice that these companytracts were on principal to principal basis.
One companytract was between Ferro alloys and M.M.T.C. for sale of the said goods to and in favour of M.M.T.C. and the other was a sale by M.M.T.C. to the foreign buyer.
The second respondent is the manufacturer cxportcr of ferro manganese and chrome concentrates.
All barter proposals were scrutinized in the first instance by the M.M.T.C. and then by the Barter Committee.
1494 of 1973.
Apart from this fact all the statutory documents viz.,
Letters of credit was also to be opened in the name of M.T.C.?
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 companymodities.
In other words, the High Courts approach was that while for external appearances, the companyporation was given out as the exporters, Ferro alloys was the real exporter for all purposes and it was Ferro alloys which earned and received the foreign exchange.
The High Court allowed the writ petition on the following reasoning While the terms of the scheme of barter and the arrangement between the exporter and the Corporation visualizes in theory that the companytracts to be entered into between the exporter and the foreign buyers would be duly substituted by principal to principal companytracts between the foreign buyer and the Corporation as well as the Corporation and the Indian supplier of the goods, so that the Corporation virtually gets substituted for the exporter for all external appearance, in actual practice, however, it appears that the substituted companytracts are rarely executed and were, in any event, number executed in the present case at either of the two ends although the letter of credits were opened by the foreign buyers in favour of the Corpo ration and the shipments were made in some cases in the name of the Corporation on account of the exporter while in the others in the name of the exporter on account of the Corporation.
The export was routed through the M. M.T.C. the appellant herein, to bring it within the system of private barter introduced by the Government of India with a view to encourage exports.
G. R.I. Form prescribed under the Foreign Exchange Regulation Act, 1947 and the shipping bill prescribed by the Customs Act were made out in the name of M.T.C. showing it as the exporter.
The declaration under Section 12 of the Foreign Exchange Regulations Act in Form GR I companytains the name of the Corporation as the exporter.
Ferro Alloys was directly sending the goods .
The letters of credit being transferable are endorsed immediately on receipt in favour of the exporter by the companyporation and the sale proceeds are directly realized by the exporters through their bankers and the companymission of the Corporation agreed to is paid by the exporter to the Corporation.
which was to be assigned to the Feffo alloys.
