TaxTMI 
TaxTMI 
2023 (10) TMI 360
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of wholesale trade of medicines, duly licensed by the Drug Control Authority. The Appellant is a qualified Engineer and an MBA graduate. The Appellant started the business of trading in medicines some time in the year 2013. The Appellant is also a partner in M/s Haeal Pharma, which is also licensed by the Assistant Director & Licensing Authority, Hyderabad, Drug Control Administration to sell, stock or exhibit for sale or distribute on wholesale drugs specified in Schedule C & H excluding those specified in Schedule X. M/s Hira Enterprises is also member of Andhra Pradesh Chemists and Druggists Association. In the course of trading in drugs, the Appellant also started exporting drugs/medicines mainly by way of courier parcels, more throug....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch the patients who need the same, in due time or reasonable time. Accordingly, in some instances when there is urgent need of medicine, in places like Vietnam, etc., the Appellant entrusted some person from his office to carry the medicines and deliver the same in person. The sale proceeds were mostly in cash and were brought to India. 4. On 05.10.2016, one Mr. Ambala Sridhar Reddy was about to depart to Vietnam. He was intercepted by the DRI Officers and upon enquiry, he informed that he is carrying certain medicines to Vietnam, which are in his checked-in baggage. The checked-in baggage was retrieved from the 'baggage make up area' and the same was opened and checked. It appeared to Revenue that he was carrying medicines in commercial q....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mg + 400 mg which is acquired from various distributors and also sell these drugs in Russia, Hong Kong, China, Ukraine. The drugs are dispatched by speed post. As the medicines sent by courier and/or speed post were not getting delivered at Vietnam, he was physically carrying medicines to Vietnam. According to his knowledge, Hepatitis C tablets are not permitted to be imported in Vietnam and some other countries, except against a prescription. He also stated that they manage to get prescription, so that the postal consignments are not stopped by the Customs, at the destination countries. He also stated that he is an Engineering graduate and for some time he was in USA on H1B Visa; that he is aware of carrying or sending drugs in commercial ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....receipt of remittance from abroad. Whatever medicines they export by carrying the same in person, the same are declared in their accounts as local sales. 7. It appeared to Revenue that the Appellant have admitted to export of medicines by carrying in his baggage in commercial quantity, without having valid prescription/permission, nor was in possession of valid permission at the time of interception. Further, it appeared that Sec 18(c) of Drugs and Cosmetics Act prohibits sale or distribution of drugs in violation of conditions of license issued under the Act. Further Rule 65(3)(1) of Drugs and Cosmetics Rules lays down conditions for supply of prescription medicines and Rule 5(1) ibid mandates that supply of drug by wholesale, shall be ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5 in the name of M/s Hira Enterprises. In their anxiety to deliver life saving medicines to needy patients and prevention of theft, which had occurred earlier when medicines were sent through speed post/EMS, they at times carried medicines in person. Further no export duty was involved on the medicines, thus there is no intent to evade payment of duty, though there was technical violation due to non filing of the shipping bill or declaration to the Customs Department. Further urged that the goods/ medicines attempted to be exported are not prohibited goods and hence Order of absolute confiscation is bad. 9. Further urges, admittedly, Appellant had been exporting medicines through courier/ Speed Post and had been receiving remittances in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts and circumstances, he also urges that penalty imposed is bad and fit to be set aside. 11. Learned AR for Revenue relies on the Impugned Order. He also raised preliminary objection as to the jurisdiction of this Tribunal. We find that admittedly Revenue has treated the quantity seized and confiscated as commercial quantity, not forming part of the baggage as per Rules. Further the confiscation order is under Sec 113(d) of the Act which is the section for goods attempted to be exported and not for goods seized as part of the baggage. For seizure or confiscation of baggage goods, the prescribed section is 113(h) and 113(i) of the Act. Accordingly, we dismiss the objection of the Revenue and proceed with the Appeal. 12. Having considered ....