2014 (1) TMI 1574 - AT - Customs

Tribunal overturns penalty for importing goods labeled as non-medicinal, grants relief

The Tribunal allowed the appeal, setting aside the order for the confiscation and penalty imposed on the appellant for importing goods suspected to be ... Drug Import - Confiscation of goods - Whether the imported goods, which bears a mark that the goods are “feed grade and not for medicinal/human use” being a drug can be imported without obtaining NOC from the Drugs Controller or not - Held that:- appellants are entitled for the benefit of exemption under Rule 43 of the Drugs and Cosmetics Rules, 1945 subject to the undertaking that the end use of the imported goods shall not for medicinal/human use and therefore, the goods are not liable for confiscation, accordingly, the impugned order is set aside. Appeal is allowed with consequential relief. The adjudicating authority is directed to release the impugned goods within seven days on receipt of this order on production of undertaking with regard to the end use - Decided in favour of assessee. Issues:Import of prohibited drugs, requirement of NOC from Drugs Controller, applicability of Rule 43 of Drugs & Cosmetics Rules, 1945, exemption for non-medicinal use goods, interpretation of relevant legal provisions.Analysis:The appeal involved a case where the appellant imported a consignment of 'Diclazuril' which was suspected to be a drug prohibited under the Drugs & Cosmetics Act. The Assistant Drug Controller confirmed that the imported goods were indeed drugs, leading to confiscation and a penalty. The appellant challenged this order, arguing that the goods were labeled as 'feed grade and not for medicinal/human use,' thus exempt from the requirement of obtaining a license from the Drugs Controller.The key contention was whether goods marked for non-medicinal use could be imported without a NOC from the Drugs Controller. The Tribunal examined the provisions of the Drugs & Cosmetics Act, 1940, which prohibit the import of certain drugs. Rule 43 of the Drugs & Cosmetics Rules, 1945 provides exemptions for substances not intended for medical use, subject to specific conditions.The Tribunal noted that the imported goods were clearly labeled for non-medicinal use, as indicated on each packing. This fact was undisputed by lower authorities. Referring to a judgment by the Madras High Court in a similar case, the Tribunal emphasized the importance of certification for non-medicinal use and labeling requirements for goods not intended for medicinal purposes.Following the Madras High Court's decision, the Tribunal held that the appellants were entitled to exemption under Rule 43 of the Drugs and Cosmetics Rules, 1945, provided they undertook that the imported goods would not be used for medicinal/human purposes. Consequently, the impugned order was set aside, and the goods were to be released within seven days upon production of the required undertaking. The appeal was allowed with consequential relief, and the early hearing application was disposed of accordingly.