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TMI Blog2008 (3) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... gs it is a mandatory and statutory obligation on the part of Customs Authorities to ascertain as to whether the drugs under import comply with the standards laid down in the provisions of Drugs and Cosmetics Act, 1940. No clearance is allowed until and unless that procedure is followed. In the instant case, medicines were Life Saving Drugs, as submitted by the party and utilization of such medicines without getting N.O.C. from the competent authority about its compliance with the standards laid down by the Government of India is a highly irresponsible and illegal act on the part of the importer. Besides, it has been stated on behalf of the department that in terms of the Condition No. 2 of the bond executed by the appellant importer, it was categorically undertaken by them not to dispose off the consignment till receipt of the N.O.C. from the Drugs Control Authorities. Hence, the applicant Commissioner has prayed for vacation of the stay granted. However, since both the appeals filed by the appellant importer and the appellant Commissioner are being taken up for hearing together and they are being disposed off by this common Order, we are of the view that no separate Order on the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of continuity bond with the specific condition that the consignment of such medicines will be produced within ten days of the receipt of the notice from the Customs Authorities at Land Customs Station, Raxaul, for further formalities. The consignment of drugs imported from Nepal was allowed clearance as per the request by the said importer for safe storage at their Patna depot on the basis of undertaking furnished by the importer as required under Rules 40 & 41 of Drugs & Cosmetics Rules, 1945 with the specific condition that - (i) The consignment would not be sold or distributed in market till the Assistant Drug Controller provides 'NO OBJECTION CERTIFICATE' after testing/verification of the samples of the medicines for its compliance as per Drugs and Cosmetics Act, 1940. (ii) In case the samples failed to comply with the provisions of the Drugs and Cosmetics Act, 1940 the consignment of such medicine would be produced within 10 days of receipt of the notice from the Customs authorities. The Assistant Drug Controller informed to the Deputy Commissioner, Land Customs Station, Raxaul for redrawal of the samples as the samples sent to him got mixed up and misplaced. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smetics Rules, 1945, will be construed as violation of the prohibitions under Chapter III of the Drugs and Cosmetics Act, 1940. As per the provisions of the Section 11 of the Drugs and Cosmetics Act, if the drugs are imported in violation of the provisions of Chapter III of the Drugs and Cosmetics Act, 1940, they would be deemed to have been imported in violation of Section 11 of the Customs Act, 1962 and all the provisions of Customs Act, 1962 would be applicable. Any drug which has been imported contrary to the provisions of the Rule 40 of the Drugs and Cosmetics Rules, 1945 would be liable for confiscation under Section 111(d) of the Customs Act, 1962. In their defense-reply, the said importer stated that almost all the medicines were life-savings drugs and have limited self-life; that they are reputed company both in India and Nepal and necessary checks are exercised by the concerned authorities in both the countries; that they waited for a reasonable time after clearance, but due to non-receipt of the 'NO OBJECTION CERTIFICATE' from the Assistant Drug Controller, they decided for sale relying on the test report given by the supplier. They further stated that the violation is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee or a Bond according to the importer's standing will rest with the Customs House. (ii) The drugs and medicines cleared against a guarantee pending test under Rule 40 of the Drugs and Cosmetics Rules must be returned by the importer within 10 days of the receipt of the notice from the Assistant Commissioner. The concession of clearance of drugs and medicines against guarantee shall be withdrawn who failed to comply with the terms of the guarantee. 2.22 Thus it is held that the notice has utterly failed to adhere to and comply with term and condition of the undertaking executed at the time of importation by releasing the consignment of the drugs stored in their Patna depot without taking the consent of Customs authorities and awaiting NOC from Assistant Drug Controller, Kolkata. Thus the notice has contravened the provisions of the Rules 40 & 41 of the Drugs and Cosmetics Rules, 1945. 2.25 Thus I find that the said importer has violated the provisions of Section 11 of the Customs Act, 1962, read with section of Drugs and Cosmetics, 1940 and Rule 40 of the Drgus and Cosmetics Rules, 1945 inasmuch as they released the consignment of the drugs which have been cleared pending test r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of law under which he is imposing the penalty and since it has not been proven that the impugned drugs were not of standard quality, spurious, misbranded or adulterated, the same cannot be confiscated and penal action cannot be taken. He cites the following decisions in support of his contentions :- (i) 2004 (173) E.L.T. 23 (Tri.-Del.) - Modipon Fibres Co. v. CCE, Ghaziabad; (ii) 2002 (148) E.L.T. 1183 (Tri.-Del.) - Albert David Ltd. v. CCE, Meerut; (iii) 2002 (144) E.L.T. 279 (Bom.) - Mohamed Rashid Mohamedi v. V.M. Dosi, I.O., NCB, Mumbai; (iv) 2004 (168) E.L.T. 417 (Tri.-Mumbai) - Gujchem Distillers India Ltd. v. C.C. and C.Ex., Surat-II; (v) 2002 (146) E.L.T. 483 (S.C.) - Damodar J. Malpani v. CCE. 8. We have considered the submissions made by both sides and we have perused the case-laws cited by both sides along with the case-records. 8.1 As regards Miscellaneous Application, we are of the view that consideration of the same at this stage will be only of academic interest, as we are disposing off both the appeals-one filed by the appellant importer and another by the department, through this Order. 8.2 As regards the department's appeal on the question of confis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lutely confiscated or allowed to be sold, as stated above. Hence, just because the goods have already been sold and the samples also are not available, we do not see any reason to accept the department's appeal and order imposition of redemption fine in lieu of confiscation. As already stated, this case should be an eye-opener for appropriate control over importation of drugs so that the public at large do not face avoidable health hazards from using untested and unchecked drugs sold to them. 8.4 As regards the imposition of penalty, the same stands on a different footing. The appellants were allowed provisional release of the impugned drugs only for storage purposes and they had no authority whatsoever to sell it in the market without specific clearance from the Drugs Control and Customs Authorities. Their submission that in the past they have done so without any action by the concerned departments, cannot be a reason to condone the lapse in this case. We consider that it is a very serious offence to import drug and sell in the market without obtaining the clearance from the Drugs Control Authorities. If there is delay on the part of the Customs Authorities and/or on the part of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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