Feed-grade drug import exemption under Drugs Rules upheld; confiscation and penalty set aside where non-medicinal use was clearly declared.

Import of a feed-grade drug marked as not for medicinal or human use was treated as falling within the exemption under Rule 43 read with Schedule D of the Drugs and Cosmetics Rules, 1945, because substances outside medical use are exempt if the prescribed declaration or labelling requirements are met. The undisputed marking on the consignments supported the exemption, and the goods were not shown to fall outside the exempted category. On that basis, the confiscation and consequential penalty were held unsustainable, and release of the goods was directed subject to an undertaking that the end use would remain non-medicinal.

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Issues: Whether the imported drug, marked as feed grade and not for medicinal or human use, was entitled to exemption from the import restriction and could be cleared without obtaining a Drugs Controller NOC, and whether the confiscation and consequential penalty were sustainable.

Analysis: Section 10 of the Drugs and Cosmetics Act, 1940 prohibits import of drugs whose import is restricted under the Rules. Rule 43 of the Drugs and Cosmetics Rules, 1945, read with Schedule D, carves out an exemption for substances not intended for medical use, subject to the prescribed declaration or labelling requirements. The imported consignments bore a clear marking that they were feed grade and not for medicinal or human use, and this factual position was not disputed. The exemption was therefore attracted, provided the end use remained non-medicinal, and the goods were not shown to fall outside the exempted category. The reasoning of the Madras High Court on the same exemption framework was followed.

Conclusion: The import was held to be covered by the exemption under Rule 43 read with Schedule D, the confiscation and penalty were unsustainable, and release of the goods was directed on an undertaking that the end use would not be for medicinal or human use.

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