Hi
In your SMTP Configuration - you have maintained as smtp.xyz.in .
Is this your mail server which you got from the network team . Try a telnet to that location at port 25 .
Secondly , try sending an email to your own address from transaction SBWP and check if the same is coming through . if there is no issue in configuration , you will get an email in your inbox.
Secondly try sending an email to the external address to see if the address itself is valid or not?
From the error description , looks like it is not fine .
Thanks
Rishi