2017 (12) TMI 1459 - HC - Customs

Permission to re-export the cargo - jurisdiction of CESTAT to pass interim orders for permitting re-export of the cargo imported by the petitioner - the cargo imported by the petitioner has been defined as spurious, which is not on account of the fact that it is unfit for human consumption and is on account of the fact that there is a mis-match in the batch number of the products, which consists of four alphabets and six numericals - Held that - the first option to be given to the petitioner/importer is for re-export of the product and it is only thereafter the respondent could exercise the power to order for confiscation of the consignment. This option has not been given to the petitioner. This Court is of the view that such option should be extended to the petitioner, as otherwise, it may lead to civil consequences. Therefore, to that extent, this Court is inclined to interfere with the impugned order. The finding rendered by the respondents rejecting the petitioner s request for re-export of the cargo is set aside and the respondents are directed to permit the petitioner to re-export the cargo within a period of one month from the date of receipt of a copy of this order - petition allowed in part.

Summary

Issues:
Challenge to order passed by Commissioner of Customs, jurisdiction of CESTAT for re-export permission, spurious drug classification based on batch number discrepancy.

Analysis:
The petitioner challenged an order by the Commissioner of Customs regarding the import of drugs with a disputed batch number. The Drug Inspector referred the sample for testing, which complied with pharmacopoeia requirements but was not cleared for human consumption, leading to a show cause notice for confiscation and penalty. The first respondent ordered confiscation and imposed a penalty, which was partially reduced by the second respondent. The petitioner sought re-export, citing Rule 41 of the Drugs and Cosmetics Act. The Court issued an interim direction for sample testing at the Central Laboratory.

The Court found the imported drugs were not spurious based on the Central Laboratory's certification. The respondents justified their decision based on a mismatch in the batch number, invoking Section 9B of the Drugs and Cosmetics Act. However, Rule 41 allowed for re-export if contraventions could not be remedied by the importer. The petitioner had corrected the batch number discrepancy, warranting the option for re-export before confiscation. The Court set aside the rejection of re-export and directed the petitioner to re-export the cargo within a month. The petitioner was granted the liberty to appeal the penalty decision to CESTAT, with exclusion of certain dates for limitation calculation. No costs were awarded, and the miscellaneous petition was closed.