G.T.NANAVATI, J. - (1.) THE Petitioner -company is a manufacturer of textiles. It exports textiles and is registered with the Reserve Bank of India as a registered exporter. The textiles which are exported by the petitioner are manufactured out of excisable goods or goods which are chargeable to import duty. In 1982 -83, the petitioner shipped polyester fabrics and sarees under three shipping bills. One consignment was meant for Aden and other two for Jeddah. In manufacture of the said goods, the petitioner had used excisable goods liable to excise duty. The petitioner submitted shipping bills to the Proper Officer, who, after satisfying himself about the nature of the goods, and payment of duty thereon, made an order permitting clearance and loading of the goods for exportation. The goods were then loaded in vessel named CHERRY CHENTAK, on or about 3rd January 1983. In respect of one consignment, the Bill of Lading was issued on 1st January 1983, and in respect of other two, the Bills of Lading were issued on 5th January 1983. The petitioner endorsed the Bills of Lading in favour of foreign buyers and negotiated the documents through a Bank. It also realised the price of the goods. Pursuant to the written order passed by the Proper Officer, the vessel left the customs station but while it was still in the territorial waters of India, it met with an accident on 7 -3 -1983 and sank off Bombay beyond the limits of the port but within the territorial waters of India. Alongwith the vessel, the goods shipped by the petitioner also sank.
(2.) IT is the petitioner's case that it had completed all the formalities for exporting the goods and even the ownership in the goods had passed on to the foreign buyers. The price of the goods was realised and the Government earned foreign exchange. Thus, it became entitled to the benefit of the export incentives, like cash incentive, replenishment licence, refund of excise duty and drawback of duty relatable to fibre, yarn and like contents used in the manufacture of fabrics. It, therefore, applied to the Government and other authorities for granting those benefits to the petitioner. The petitioner has been granted cash incentive and replenishment licence. The petitioner's claim for refund of excise duty has also been granted. However, the petitioner's claim for drawback of duty was rejected by the Assistant Collector of Customs by his order dated 3 -5 - 1983 on the ground that the vessel carrying the goods sank within the territorial waters of India, and hence, 'export' within the meaning of Section 2(18) read with Section 2(27) of the Customs Act, 1962, did not take place. The petitioner filed an appeal to the Collector of Customs but that was also rejected on 31 -8 -1983. The appeal filed to the Government of India was also dismissed on 31 -12 -1984. The petitioner has, therefore, approached this court challenging those orders and for obtaining a writ of Mandamus directing the respondents to grant drawback of duty to which it became entitled under the Customs and Central Excise Duties Drawback Rules, 1971 (hereinafter referred to as 'the Drawback Rules'). The learned Counsel for the petitioner contended that the petitioner had completed all the formalities which it was required to complete so as to export the said goods, including payment of duty thereon. The title to the goods had passed to the foreign buyer. The price of the goods was paid by the buyers and the Government of India earned foreign exchange to that extent. Therefore, in the context of the Drawback Rules, it can be said to have exported the goods notwithstanding subsequent sinking of the vessel alongwith the export goods within the territorial waters of India. It was further submitted that 'India', in the context of the Drawback Rules, would mean the landmass of India. On the other hand, it was contended by the learned Standing Counsel for the respondents that unless the export goods are taken out of the territorial waters of India to a place outside the territorial waters of India, they cannot be said to have been exported as contemplated by the Drawback Rules and therefore the petitioner has been rightly denied the drawback available on exported goods.
(3.) THE Customs Act which governs export of goods from India defines the term 'export' and according to that definition it means taking out of India to a place outside India. 'Export goods' are defined in Section 2(19) as meaning 'any goods which are to be taken out of India to a place outside India. ' 'India' is defined by Section 2(27) as including 'territorial waters of India'. Section 12 of the Customs Act provides for levy of duty on goods imported into or exported from India. Section 14 provides for valuation of goods for purposes of assessment. The value of such goods is to be determined on the basis of the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation or exportation, as the case may be. Section 16 provides for the date for determination of rate of duty and tariff valuation of export goods. It is either the date on which the shipping bill or the bill of export is presented, or the date of payment of duty. As required by Section 50, the exporter of any goods has to make an entry thereof by presenting to the Proper Officer in the case of goods to be exported in a vessel a shipping bill. If the Proper Officer is satisfied that the goods exported are not prohibited goods, and the exporter has paid the duty, he has to make an order under Section 51 permitting clearance and loading of goods for exportation. After entry outwards is granted by the Proper Officer, the Master of the vessel can permit loading of export goods. The person incharge of the vessel carrying export goods has to deliver to the Proper Officer an export manifest. The vessel cannot depart from the Customs Station until a written order to that effect is given by the Proper Officer under Section 51. The Act has made a provision for drawback of duty on exported goods. Though it is not necessary for the purpose of this case, it may be stated that Section 75 provides for drawback on imported materials used in the manufacture of goods which are exported. In exercise of that power, and also the power available under the Central Excises and Salt Act, the Central Government has framed Drawback Rules. In this case we are concerned with drawback of excisable materials used in the manufacture of goods which were sought to be exported. ;