2019 (5) TMI 793 - HC - Customs

Classification of goods - Electronic Nicotine Delivery systems (ENDS) including e-Cigarettes, Heat-Not Burn devices, Vape, e-Sheesha, e-Nicotine Flavoured Hookah, and the like devices - Drugs or not - circular dated 27.11.2018, all Customs Authorities have been requested to ensure import consignments of ENDS are referred to drug control authorities - HELD THAT - A plain reading of Clause (b) of Section 3 of the said Act indicates that it covers all medicines for internal or external use, and all substances intended to be used for or in the diagnosis, treatment mitigation or prevention of disease or disorder. It does not appear that the devices in question are sold as therapeutic devices, or as having any medicines for internal or external use of human beings, or animals intended to be used for in the diagnosis treatment of any disease. The said products do not have any medicinal value - this Court is, prima facie, of the view that the products do not fall within the definition of a drug , as defined under section 3(b) of the Drugs and Cosmetics Act 1940. If the product in question is not a drug, respondent no.1 would not have the jurisdiction to issue the impugned circular. In this view, the impugned communication and the impugned circular are stayed, till the next date of hearing. List on 17.05.2019.

Summary

Issues:
Challenge to communication and circular regarding sale and import of electronic nicotine delivery systems (ENDS) and related devices, classification of ENDS under Drugs and Cosmetics Act, 1940, jurisdiction of authorities to regulate ENDS.

Analysis:
The petitioners challenged a communication and circular issued by the respondent no.1 regarding the sale, import, and regulation of ENDS and related devices. The communication dated 22.02.2019 instructed State licensing authorities to restrict the sale, distribution, and advertisement of such devices unless approved under the Drugs and Cosmetics Act, 1940. Similarly, the circular dated 27.11.2018 directed Customs Authorities to refer import consignments of ENDS to drug control authorities for compliance with the Act. The petitioners argued that ENDS are safer alternatives to combustible cigarettes as they do not involve inhaling tar. They claimed that the circulars impede consumers' right to choose these devices as a less harmful option.

The respondents contended that the safety of e-cigarettes is still debatable and cannot be accepted without evidence. They argued that ENDS are akin to nicotine gum and fall under the definition of a drug as per Section 3(b) of the Drugs and Cosmetics Act, 1940. Referring to Schedule K Rule 23, they highlighted that products similar to nicotine gum are covered under the Act. They emphasized that ENDS are used for addiction control and replacement therapy, making them subject to regulation under the said Act. The respondents also mentioned ongoing legal challenges against the notifications without any interim relief granted.

The Court examined Section 3(b) of the Drugs and Cosmetics Act, 1940, which defines 'drug' to include substances intended for diagnosis, treatment, or prevention of diseases. It noted that the ENDS in question were not marketed as therapeutic devices or for medicinal purposes, lacking any medicinal value. Consequently, the Court prima facie opined that these products do not meet the Act's definition of a drug. Additionally, the petitioners referred to a report from the Drugs Consultative Committee stating that E-Cigarettes do not fall under the Act's purview as they are not considered drugs.

Considering the above arguments and findings, the Court stayed the impugned communication and circular until the next hearing, questioning the jurisdiction of the authorities to regulate ENDS if they do not qualify as drugs under the Drugs and Cosmetics Act, 1940. The respondents were given time to file their counter affidavit, followed by a rejoinder before the next scheduled hearing on 17.05.2019.