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Issues Involved:
1. Definition and interpretation of "export" under the Customs Act, 1962 and the Drawback Rules, 1971. 2. Eligibility for drawback of duty when goods are lost within the territorial waters of India. 3. Relevant judicial precedents and interpretations by different High Courts. Detailed Analysis: Issue 1: Definition and Interpretation of "Export" under the Customs Act, 1962 and the Drawback Rules, 1971 The Customs Act, 1962 defines "export" as taking goods out of India to a place outside India. "Export goods" means any goods which are to be taken out of India to a place outside India, and "India" includes the territorial waters of India. However, Rule 2(c) of the Drawback Rules defines "export" to include the loading of provisions or stores for use on board a vessel or aircraft proceeding to a foreign port. This Court has interpreted these definitions in the context of the Drawback Rules to mean that "India" should be interpreted as the landmass of India. This interpretation aligns with the purpose of the Drawback Rules, which is to encourage exports by making Indian goods more competitive in the international market. Issue 2: Eligibility for Drawback of Duty When Goods are Lost Within the Territorial Waters of India The petitioner-company had completed all formalities for exporting the goods, including payment of duty, and the ownership of the goods had passed to the foreign buyers. The goods were loaded onto the vessel CHERRY CHENTAK, which sank within the territorial waters of India. The Assistant Collector of Customs denied the drawback of duty on the grounds that the export did not take place as the goods did not leave the territorial waters of India. However, this Court held that for the purpose of the Drawback Rules, the term "export" should be interpreted to mean that the goods were exported once they left the landmass of India and were out of the control of the exporter. Thus, the petitioner-company was entitled to the drawback of duty. Issue 3: Relevant Judicial Precedents and Interpretations by Different High Courts This Court referred to several judicial precedents to interpret the term "export": - Prabhat Cotton & Silk Mills Ltd. v. Union of India (1982): This case interpreted "goods exported from India" to mean goods exported from the landmass of India, not from the territorial waters. - Lucas TVS v. Assistant Collector of Customs (1987): The Madras High Court held that goods must be treated as exported for drawback purposes once they are out of the control of the exporter and on their way to the destination country. - V.M. Salgaocar and Brother Pvt. Ltd. v. Union of India (1987): The Bombay High Court held that export takes place only when goods are taken out of the territorial limits of India. However, this Court disagreed with this interpretation for the purpose of the Drawback Rules, emphasizing the need to consider the commencement and completion of the export process. Conclusion This Court concluded that the petitioner-company had indeed exported the goods as they were loaded onto the vessel and left the landmass of India, even though they sank within the territorial waters. The orders passed by the Assistant Collector, the Collector of Customs, and the Government were quashed, and a writ of Mandamus was issued directing the respondents to grant the drawback of duty to the petitioner-company as permissible under the Drawback Rules. Final Judgment The petition was allowed, and the impugned orders were quashed. A writ of Mandamus was issued directing the respondents to grant the drawback to the petitioner-company in respect of the exported goods, with no order as to cost.
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