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2013 (3) TMI 166 - AT - CustomsImports from China not through prescribed point of entry into India - Confiscation orders and penalty - 3,21,264 pieces of “Z” MAGNETISM FOR MEN DEODORANT BODY SPRAY” confiscated - whether the goods imported were “cosmetics” or “substance” falling under Rule 133 r.w.r. 43 of the Drugs & Cosmetics Rules, 1945? - whether cosmetic is permitted to be imported through a point of entry different from point of entry prescribed by Rule 43A read with CBEC Circular No. 8/2010-Cus. dated 26-3-2010. Held that:- The term “drug” as defined by Section 3(b) of the Drugs and Cosmetic Act, 1940 has inclusive definition covering “substance” within its fold by sub-clause (ii) and (iii) thereof. Thus any “substance” which would be used for the preparation of medicine is also included in the scope and ambit of the term “drug”. Only when a “substance” is not intended for medicinal use, such substance enjoys exemption from Chapter III of the Drugs and Cosmetics Act, 1940 and Rules made thereunder subject to conditions prescribed by Schedule “D” under Rule 43 of the Rules. The term “Cosmetic” defined by Section 3(aaa) of the Drugs and Cosmetics Act, 1940 is altogether different goods from “drug” and “substance” in the eyes of law. As decided in Chimanlal Jagjivandas Sheth v. State of Maharashtra [1962 (9) TMI 34 - SUPREME COURT] the expression “substances” is something other than medicine but used for treatment. Such interpretation brings a significant different between “substance” and “Cosmetic”. Also interpreting meaning of the term “cosmetic” in the case of Puma Ayurvedic Herbal (P) Ltd. v. CCE (2006 (3) TMI 141 - SUPREME COURT OF INDIA) the cosmetic products are meant to improve appearance of person, that is they enhance beauty, whereas a medicinal product or medicament is meant to treat some medical condition. So another word “substance” used in the same legislation cannot be interpreted to mean “cosmetic” also. In Schedule “D” appended to Drugs and Cosmetics Rules, 1945 both the words i.e., “substance” and “cosmetic” appears under independent serial number bringing out significant difference between the two without being interchangeably used one for the other for their distinct character, nature and properties. So the argument of Appellant that “substance” covers “cosmetic” within its scope is devoid of merit. There is no dispute that present imports were cosmetic. That was not a “substance” since cosmetic is different goods altogether. Rule 133 of the Drugs and Cosmetics Rules limits the import of cosmetics through the points of entry specified under Rule 43A. However, under Schedule “D” to the said Rules, an exemption has been provided for substances not intended for medical use from the provision of Chapter III of the Drugs and Cosmetics Act and Rules made thereunder. The phrase ‘substances not intended for medical use’ would only relate to substances which would otherwise fall under the definition of the term ‘drug’ under section 3(b) of the Act, but are being imported not for medicinal use or for some other purposes or are of commercial quality and are being labeled indicating that they are not for medicinal use. For the purpose of import of cosmetics, provision of Rule 133 therefore remain applicable. Accordingly, import of cosmetics at points of entry/places other than those specified under Rule 43A may not be permitted as per the provisions of the Drugs and Cosmetics Rules, 1945. The points of entry have been specifically mentioned in Rule 43A such as Chennai, Kolkata, Mumbai, Nhava Sheva, Chochin, Kandla, Delhi, Ahmedabad, Hyderabad and Ferozpur Cantonment, Amritsar, Ranaghat, Bongaon and Mohiassan Railway Station. If the imports are noticed through Customs stations, other than the one notified as mentioned above, then necessary action may be taken for non-compliance of the Drugs and Cosmetics Rules in respect of such imports Appellant’s claim that the cosmetic imported by appellant shall fall in the category of “substance” in item of Schedule “D” under Rule 43 is baseless & when the goods were not imported through prescribed point of entry under Rule 43A of the Rules, the goods are bound to suffer consequence of law prescribed by Customs Act, 1962 being ‘prohibited goods’ as defined by section 2(33) thereof. First landing of container is not the criterion to be satisfied in the above Rule. Since in this case, the entry under Section 46 was made at Pithampur and not at Nava Sheva, there is a violation of Rule 43A of the Rule which is valid objection of Revenue - confiscation of the cosmetic imported by the appellant was justified and other consequence of adjudication is in conformity with law - redemption fine is reduced to Rs. 5,00,000 (Rupees five lakhs) and penalty is reduced to Rs. 1,00,000/- to prevent recurrence of contravention of the provisions of the law - partly in favour of assessee.
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