Imported drugs sold without statutory clearance may attract penalty, while redemption fine is unavailable if goods are no longer present.

Imported drugs released only for safe storage under bond could not be sold before obtaining the prescribed customs and drug control clearance. Unauthorized market sale of such goods was treated as a serious breach of the statutory testing and clearance regime, so the importer's penalty was upheld. Redemption fine was not justified where the goods had already been sold and were no longer available for confiscation-linked redemption, making such relief incapable of practical enforcement.

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Issues: (i) Whether imported drugs, released on bond pending test and later sold without clearance from the drug control authorities, were liable to confiscation and redemption fine; (ii) Whether penalty on the importer for sale of the drugs without the requisite clearance was justified.

Issue (i): Whether imported drugs, released on bond pending test and later sold without clearance from the drug control authorities, were liable to confiscation and redemption fine.

Analysis: The goods had been allowed release only for safe storage under bond and subject to compliance with the testing procedure under the Drugs and Cosmetics law. The import process for drugs required compliance with the statutory control regime, and the importer was not entitled to dispose of the goods before obtaining the necessary clearance. However, the facts were peculiar because the goods had already been sold and the samples were unavailable. In those circumstances, redemption fine could not be meaningfully imposed after the goods were no longer in existence. The department's appeal for confiscation-related relief therefore could not succeed.

Conclusion: The demand for confiscation-linked relief was rejected and no redemption fine was imposed.

Issue (ii): Whether penalty on the importer for sale of the drugs without the requisite clearance was justified.

Analysis: The importer had no authority to sell the drugs in the market without specific clearance from the customs and drug control authorities. Prior conduct in other consignments could not excuse the breach. The failure to follow the statutory testing and clearance mechanism in respect of imported drugs was treated as serious, particularly because such goods affect public health. The quantum of penalty was also found to be modest in relation to the value of the goods and required no reduction.

Conclusion: The penalty on the importer was upheld.

Final Conclusion: The order declined to interfere with the penalty and also declined to grant redemption-fine relief, with both sides obtaining no substantive appellate relief.

Ratio Decidendi: Imported drugs released only for storage under bond cannot be sold without the prescribed statutory clearance, and while penalty may be sustained for such unauthorised sale, redemption fine is not justified where the goods are no longer available for confiscation-linked redemption.

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