Cosmetics Imported Without CDSCO Licence May Be ‘Prohibited Goods’: Bombay High Court Refuses Re-Export of DRI Seized Consignments
Bench notes that allowing the goods to be re-exported without completion of investigation and adjudication proceedings could undermine enforcement of customs and regulatory laws
Justice G. S. Kulkarni, Justice Aarti Sathe, Bombay High Court
The Bombay High Court has refused to permit the re-export of imported cosmetic consignments seized by Directorate of Revenue Intelligence (DRI), holding that goods imported without the mandatory registration from the Central Drugs Standard Control Organization (CDSCO) may fall within the category of “prohibited goods” under the Customs Act, 1962, thereby justifying seizure and investigation.
The Court considered the fact that the investigation into alleged mis-declaration and regulatory violations was still underway. In such circumstances, allowing the goods to be re-exported without completion of investigation and adjudication proceedings could undermine enforcement of customs and regulatory laws, it said. The bench emphasised that the warehousing mechanism under customs law merely allows deferral of duty and cannot be used to bypass statutory import restrictions imposed under other laws.
The pertinent question that the Division Bench was dealing with was 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.
Justice G. S. Kulkarni and Justice Aarti Sathe said that the matter has to be considered on the conspectus of a conjoint application of the provisions of the Customs Act, the Drugs and Cosmetics Act, 1940 and the Cosmetics Rules 2020.
Accordingly, the Bench noted, “…necessarily by incorporation of the words “any other law” in the provisions of Section 2(33) of the Customs Act, read with the Drugs and Cosmetics Act 1940 and the Rules framed thereunder become ipso facto applicable to any imports apart from the applicability of the provisions of the Customs Act. In such context, Section 10 of the Drugs and Cosmetics Act (supra) is a provision which prescribes prohibition on import of certain drugs or cosmetics, when such provision ordains that no person shall import any Drug or Cosmetic for the import of which a licence is prescribed, and otherwise than under such license thereby making a prior licence mandatory for the imports”.
“It is, thus as clear as the daylight, that as per the provisions of Section 10 of the Cosmetics Act, no import of Cosmetics could have been undertaken by the petitioner without a licence, as rightly contended on behalf of the Respondent. Admittedly the goods in question were imported into India without a licence. This was not permissible, considering the conjoint effect of the aforesaid provisions. Thus, the provisions of Section 2(33) which define prohibited goods to inter alia mean any goods the import of which is subject to the prohibition either under the Customs Act or ‘any other law for the time being in force’, stand breached and/or not complied thereby rendering the goods in question “prohibited goods”, the Bench further observed.
Advocate Dr. Sujay Kantawala appeared for the petitioner and Advocate Jitendra B. Mishra appeared for the respondent.
The Court was hearing a petition filed by Glamstone Cosmetics Pvt. Ltd., which sought to quash a seizure memo issued by the Directorate of Revenue Intelligence (DRI) and requested permission to re-export three consignments of cosmetics imported from the UAE. The company contended that the goods were never intended for domestic sale and had been imported only to be warehoused in India due to lower storage costs, with the intention of re-exporting them later.
The petitioner argued that since it had filed warehousing bills of entry, the goods were not meant for home consumption and therefore should have been allowed to be re-exported under the warehousing provisions of the Customs Act. It also submitted that the absence of a CDSCO licence was merely a regulatory issue and did not justify seizure or confiscation, particularly when the importer was willing to re-export the goods at its own cost.
However, the DRI opposed the plea, stating that the cosmetics were imported without the mandatory CDSCO registration required under the Drugs and Cosmetics Act, 1940 and the Cosmetics Rules, 2020, making the goods restricted or prohibited under the import policy. Authorities also alleged gross undervaluation, stating that while the importer declared the goods to be worth about ₹1.64 crore, a government-approved valuer assessed their value at over ₹10 crore.
The revenue authorities further contended that filing warehouse bills of entry did not exempt an importer from complying with regulatory requirements at the time of import. They argued that the move to warehouse the goods was a calculated attempt to bypass licensing requirements and avoid regulatory scrutiny after similar consignments from the same supplier had already come under investigation.
Accordingly, the Court declined to interfere with the seizure or permit re-export at this stage, holding that the authorities were justified in continuing their investigation into the import of the consignments and the alleged violations of customs and drug regulatory laws.
“Before parting, we may observe that the goods in question are meant for human use/consumption. The Drugs and Cosmetics Act, 1940 is an Act intended to regulate the import, manufacture, distribution, sale of drugs and cosmetics. Thus, such legislation with the rules framed thereunder prescribe standards to be complied by the drugs being imported, which may be cleared, sold and/or distributed in India. Such products more particularly being imported, concern the health of the people, wherever, even when the goods are sought to be re-exported. Thus, the provisions of the Drugs and Cosmetics Act and the Rules framed thereunder read with provisions of the Customs Act, qua any imports are required to be strictly implemented, and more importantly, considering the larger public interest and the ill-effects of the sub-standard and unlicensed products, when they are being imported in a clandestine manner, and smuggled into the Indian territory”, the Bench noted.
Cause Title: Glamstone Cosmetics Pvt. Ltd. v. The Union of India & Ors. [Neutral Citation: 2026:BHC-AS:11564-DB]
Appearances:
Petitioner: Dr. Sujay Kantawala a/w. Aditya Talpade, Pratik Karande, Diksha Talpade, Prajwal Padole, Akash Sable, Aishwarya Kantawala, Advocates.
Respondent: Jitendra B. Mishra a/w. Sangeeta Yadav, Ashutosh Mishra, Rupesh Dubey, Advocates. Shalabh Katiyar, Addl. Director, DRI, Veenu Kavaria, Deputy Director, DRI.