Duty drawback requires export beyond territorial waters; cargo destroyed before crossing India's waters was not treated as exported.

Duty drawback under the Customs and Central Excise Duties Drawback Rules, 1971 is available only when goods manufactured in India are exported, meaning they are taken beyond India's territorial waters to a place outside India. Where the vessel sank within territorial waters and the cargo was destroyed before crossing them, the goods had not been taken out of India. On that basis, no export in the statutory sense had occurred and duty drawback was not admissible.

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Issues: Whether duty drawback was available where the exported cargo sank and was destroyed while still within the territorial waters of India.

Analysis: Drawback under the Customs and Central Excise Duties Drawback Rules, 1971 is available only to goods manufactured in India and exported, and export means taking the goods out of India to a place outside India. The decisive factor is movement of the goods beyond the territorial waters of India. Where the vessel sank within the territorial waters and the cargo was destroyed before crossing them, the goods were not taken out of India and no export, in the sense required by the Rules, had taken place.

Conclusion: Duty drawback was not admissible for the cargo destroyed within the territorial waters of India.

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