Writ appeals allowed, impugned orders set aside. Goods to be released as per declared value.

The writ appeals were allowed, and the impugned orders were set aside. The court directed the authorities to release the goods based on the declared value, verifying compliance with Rule 43 and Schedule D. The petitioners were also given the option to address valuation issues before the CESTAT. The court reaffirmed that statutory rules cannot be overridden by executive orders or settlements.

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Issues Involved:
1. Requirement of Form 10 license for importing certain substances.
2. Classification of imported substances as drugs or non-drugs.
3. Compliance with Rule 43 read with Schedule D of the Drugs and Cosmetics Rules, 1945.
4. Evaluation of the impugned orders based on statutory provisions and executive settlements.
5. Legal standing of statutory rules versus executive orders.
6. Conditions for the release of imported goods and potential re-export directives.
7. Implications of valuation disputes on imported goods.

Detailed Analysis:

1. Requirement of Form 10 License for Importing Certain Substances:
The core issue revolves around the necessity of a Form 10 license as mandated by the Drugs and Cosmetics Rules, 1948. The appellants, M/s D.K. Enterprises and M/s Kawaral & Co., challenged the drug authorities' communication requiring this license. The substances in question, including L-Leucine, L-Valine, L-Creatine, L-Taurine, D-Calcium Pentothenate, and Suphadiazine, were claimed by the petitioners to be non-pharmaceutical and non-drug items.

2. Classification of Imported Substances as Drugs or Non-Drugs:
The learned Judge, disagreeing with a previous decision, relied on a report from the Central Drug Laboratory, Kolkota, which cast doubt on the labels affixed on the containers. The Judge directed that an investigation be conducted to determine if the substances were drugs for human use, necessitating a Form 10 license. The authorities concluded that the substances were intended for human use and should be treated as drugs, despite the labels stating "not for pharma and drug use."

3. Compliance with Rule 43 Read with Schedule D of the Drugs and Cosmetics Rules, 1945:
The petitioners argued that they had complied with Rule 43 and Schedule D, which should exempt them from requiring a Form 10 license. The authorities, however, based their decision on certain admissions made by drug authorities and a settlement before the Delhi High Court, concluding that the materials were intended for human use and thus required a license.

4. Evaluation of the Impugned Orders Based on Statutory Provisions and Executive Settlements:
The impugned orders were challenged on the grounds that they bypassed statutory provisions and relied on an executive settlement from the Delhi High Court. The court emphasized that statutory rules cannot be overridden by executive orders, citing the Supreme Court's decision in Priya Blue Industries Limited Vs. Commissioner of Customs (Preventive).

5. Legal Standing of Statutory Rules Versus Executive Orders:
The court reiterated that statutory rules, such as those under Rule 43 read with Schedule D, provide certain exemptions that cannot be negated by executive orders or settlements. The court cited K. Kuppusamy and another Vs. State of T.N. and others to support this principle.

6. Conditions for the Release of Imported Goods and Potential Re-export Directives:
The court directed the authorities to release the goods based on the declared value, provided the petitioners complied with Rule 43 and Schedule D. The authorities were also instructed to verify the labels affixed on the goods. If the substances were found to be used for purposes other than declared, the authorities could proceed against the petitioners.

7. Implications of Valuation Disputes on Imported Goods:
The court allowed the petitioners to approach the CESTAT regarding valuation disputes. It was clarified that except for one item, other goods covered under time-barred Bills of Entry should be re-exported. The authorities were directed to release the goods within two weeks, subject to compliance with the statutory provisions.

Conclusion:
The writ appeals were allowed, and the impugned orders were set aside. The court directed the authorities to release the goods based on the declared value, verifying compliance with Rule 43 and Schedule D. The petitioners were also given the option to address valuation issues before the CESTAT. The court reaffirmed that statutory rules cannot be overridden by executive orders or settlements.

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