2026 (3) TMI 452 - HC - Customs

Prohibited Goods: cosmetics imported without mandatory regulatory registration are not eligible for warehousing or automatic re export relief.

Imports of cosmetics lacking mandatory CDSCO registration/licence are treated as prohibited goods and not lawfully importable; therefore warehousing and ... Prohibited goods - import and trading of cosmetics - without required CDSCO registration - illegal import - seizure and confiscation under Section 110 and Section 111 of the Customs Act - valuation and mis-declaration - Whether the cosmetics in question, subject matter of the Bills of Entry filed by the petitioner for warehousing and alleged not to be meant for home clearance, would suffer an embargo for a re-export and proceedings for confiscation under the provisions of Section 111 of the Customs Act, 1962 (“Customs Act”). Prohibited goods - illegal import - seizure and confiscation under Section 110 and Section 111 of the Customs Act - Legal character of the imported cosmetics where import was effected without CDSCO registration and consequence under the Customs Act. - HELD THAT: - On a conjoint reading of the Customs Act, 1962 and the Drugs and Cosmetics Act, 1940 together with the Cosmetics Rules, 2020, importation of cosmetics without the mandatory registration/license prescribed by the Drugs and Cosmetics law renders such consignments subject to the prohibition in Section 2(33) of the Customs Act. Section 10 of the Drugs and Cosmetics Act, read with Rule 12 of the Cosmetics Rules, 2020, mandates prior registration for import of cosmetics; absence of that registration means the import is in contravention of the other law and therefore falls within the statutory notion of prohibited or illegal import. Once goods are so characterised, provisions for seizure under Section 110 and confiscation under Section 111 (including clause (d)) are attracted and legitimately invoked by the authorities pending investigation and adjudication. [Paras 36, 37, 38] The cosmetics imported without the requisite CDSCO registration are prohibited/illegal imports and liable to seizure and confiscation under Sections 110 and 111 of the Customs Act. Exemption from regulatory licence requirement by filing warehouse bill of entry or by intent to re export - clearance for re export under Section 69 - HELD THAT:- The warehousing scheme does not permit importation of goods that are otherwise prohibited under any other law; Section 69(1) allowing re export of warehoused goods without payment of duty applies only to warehoused goods that are lawfully imported and not prohibited. The Court found no material to show a prior bona fide intention to import solely for warehousing and re export, and held that bringing goods into territorial waters without the mandatory licence cannot be legitimised by later filing of warehouse bills or by an asserted re export intent. Consequently, the plea that warehousing/re export removes the need for prior compliance with the Drugs and Cosmetics regulatory regime is rejected. [Paras 40, 41] Filing warehouse bills of entry or claiming an intention to re export does not absolve the importer from mandatory regulatory licensing; Section 69 does not apply to prohibited/illegal imports and does not preclude seizure. Final Conclusion: The petition is dismissed: cosmetics imported without mandatory CDSCO registration are prohibited/illegal imports under the combined statutory scheme and liable to seizure/confiscation; warehousing or asserted re export intention does not relieve the importer of the prior regulatory requirements or prevent lawful seizure and investigation. Issues: Whether the petitioner, having imported cosmetics without required CDSCO registration and having filed warehousing bills of entry, is entitled to re-export the consignments and whether the seizure under Section 110 and potential confiscation under Section 111 of the Customs Act, 1962 is permissible.Analysis: The import and customs statutory framework applicable to the goods includes the definitions of 'imported goods' and 'prohibited goods' under Section 2(23) and Section 2(33) of the Customs Act, 1962, the requirements for entry and self-declaration under Section 46 read with Section 17, provisions for warehousing including bond obligations under Section 59, and the statutory route for clearance of warehoused goods for export under Section 69. The Drugs and Cosmetics Act, 1940 and the Cosmetics Rules, 2020 operate as 'any other law' incorporated into the Customs code for import regulation; Section 10 of the Drugs and Cosmetics Act and Rules 12, 13, 18-20 of the Cosmetics Rules, 2020 mandate prior registration/import licence for cosmetics and prescribe detention, testing and remedial procedures where regulatory compliance is lacking. Where goods are imported in contravention of a prohibition under the Drugs and Cosmetics Act (i.e., without mandatory registration/licence), such goods fall within the definition of 'prohibited goods' (Section 2(33)) and may constitute an 'illegal import' (Section 11A(a)), engaging seizure powers (Section 110) and confiscation provisions (Section 111). The warehousing regime and Section 69 operate only in respect of goods lawfully importable and not prohibited; warehousing does not permit importation in breach of other statutory prohibitions. The Court found no reliable material of a prior antecedent intent to import solely for re-export, and the documentary and testimonial record supported the respondents' case of regulatory non-compliance and possible mis-declaration and undervaluation, justifying continued investigation and seizure proceedings.Conclusion: The petitioner is not entitled to re-export the consignments as a matter of right where mandatory CDSCO registration/licence for import of the cosmetics was absent; the consignments were properly characterized as 'prohibited goods' under Section 2(33) of the Customs Act, 1962 read with Section 10 of the Drugs and Cosmetics Act, 1940 and the Cosmetics Rules, 2020, and seizure under Section 110 and potential proceedings under Section 111 of the Customs Act, 1962 are permissible. The petition is rejected.