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Issues Involved:
1. Jural relationship between the petitioners and the Corporation in relation to exports. 2. Entitlement to the benefit of tax credit certificates under section 280ZC of the Income-tax Act. Detailed Analysis: 1. Jural Relationship Between the Petitioners and the Corporation: The court examined the precise legal relationship between the petitioners (manufacturer-exporters) and the Minerals and Metals Trading Corporation of India Ltd. (the Corporation) concerning the export transactions. The exports were routed through the Corporation to benefit from the Government's barter scheme, which aimed to promote exports by linking foreign exchange earnings on exports with the foreign exchange required for importing essential materials. The court noted that while the Corporation appeared as the exporter in outward documents, the real exporters were the petitioners. The petitioners were responsible for the quality and quantity of the goods, entered into contracts with foreign buyers, and realized the sale proceeds, with the Corporation earning a nominal commission for its supervisory role. The court found that the contracts between the petitioners and the Corporation did not constitute a sale of goods to the Corporation. Instead, it was an arrangement to route exports through the Corporation, which acted as a government agency to facilitate and regulate foreign trade. The Corporation's involvement was primarily to oversee the transactions and ensure compliance with government policies. The court concluded that the petitioners retained title to the goods and were the real exporters, while the Corporation's role was limited to facilitating the export process. 2. Entitlement to Tax Credit Certificates: Section 280ZC of the Income-tax Act provides that a person who exports goods and receives the sale proceeds in India is entitled to a tax credit certificate. The court emphasized that the incentive was intended for the real exporter, not merely the ostensible one. Despite the Corporation appearing as the exporter in external documents, the petitioners were the ones who exported the goods, earned the foreign exchange, and received the proceeds. Therefore, the petitioners were entitled to the tax credit certificates. The court held that the authorities had misdirected themselves by rejecting the petitioners' claims based on the form of the arrangement rather than its substance. The court quashed the impugned orders that rejected the petitioners' claims and upheld the Corporation's claims. The competent authority was directed to determine afresh the entitlement of the petitioners to the tax credit certificates under section 280ZC, considering the court's observations. Conclusion: The court allowed the petitions, quashed the impugned orders, and directed the competent authority to reassess the petitioners' entitlement to tax credit certificates. The petitioners were awarded costs, with counsel's fees assessed at Rs. 750 in each case.
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