Calcutta High Court
Balmukund Chemicals Pvt. Ltd. & Anr vs Assistant Drug Controller Of India & Ors on 21 March, 2011
Author: Indira Banerjee
Bench: Indira Banerjee
ORDER SHEET
W.P. No.1653 of 2010
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
Balmukund Chemicals Pvt. Ltd. & Anr.
-Versus-
Assistant Drug Controller of India & Ors.
Mr. Biswajit Mukherjee with Mr. Shovendu
Banerjee & Mr. Samrat Chowdhury,
Advocates,
... for the petitioners.
Mr. R. Bharadwaj with Mr. Subir Kr. Saha,
Advocates,
... for the respondent no.3.
Mr. R.N. Bag with Mr. Joydip Banerjee, Advocates, ... for the Union of India.
Before The Hon'ble Justice INDIRA BANERJEE 21.03.2011 In this writ petition, the petitioners have sought orders directing the respondent authorities to forthwith release the consignment described as refined Glycerin USP MIN 99.5% imported 2 by the petitioners by Bill of Entry No.511310 dated 15th December, 2009. USP is the abbreviation for United States Pharmacopeia, a compendium of standards applicable to any article recognized in the compendium, intended or labeled for use as a drug or as an ingredient in a drug.
The petitioner no.1 claims to carry on business of import and export. The petitioner apparently imported refined Glycerine USP MIN 99.5% from Pacific Oleo Chemicals SDN-BMD, Malaysia, which is hereinafter referred to as the Malaysian manufacturer.
A Bill of Entry being Bill of Entry No.511310 dated 15th December, 2009 was filed before assessment and clearance of the consignment.
According to the petitioner the goods were examined by Customs Department and found to have been correctly described. It is the case of the petitioners that there was no mis-declaration either in respect of the valuation or the description of the substance.
The petitioners are aggrieved by refusal of the Customs Authorities to allow clearance of the goods on the ground of want of 'No Objection' Certificate from the Department of Drug Control. It appears that on 24th December, 2009, the petitioners were directed to 3 submit import licence in Form 10, and licenses for stocking and selling in Forms 20B and 21B.
Admittedly, the petitioner does not have import licence to import refined Glycerine. According to the petitioner, the Assistant Drug Controller, Customs House, Kolkata, caused samples to be drawn for examination.
By a letter no.ADC-5-2/2010/470 dated 12th July, 2010, written on behalf of the Assistant Drug Controller, the petitioners were directed to re-export the entire consignment of refined Glycerine.
The short question involved in this writ application is whether the petitioners could have been directed to re-export the entire consignment of refined Glycerine imported from the Malaysian Manufacturer.
Mr. Mukherjee, appearing on behalf of the petitioner, referred to the Import and Export Policy in terms whereof Glycerol was freely importable.
Mr. Mukherjee submitted that there are different categories of goods. Some goods are restricted goods and some goods are free, for which no import licence is required.
4
Mr. Mukherjee pointed out that Glycerol (Glycerine) is classified as an organic chemical under Chapter 29 of ITC (HS), (the abbreviation of Indian Trade Classification based on Harmonized System) Classifications of Export & Import Items. Mr. Mukherjee drew the attention of this Court to Export Import Exim Code 2905 45 00 relating to Glycerol (Glycerine).
The attention of this Court was also drawn to certain restricted items which are importable under licence, including Entry 2941 10 10 relating to Penicillins & its salts, import whereof is free, but subject to registration and other requirements as prescribed by the Drug Controller General of India under the provisions of Drugs and Cosmetics Act, 1940.
Mr. Mukherjee argued that there were several other substances import whereof was permitted subject to registration and other requirements as prescribed by the Drug Controller General of India under the provisions of the Drugs and Cosmetics Act, 1940. Mr. Mukherjee pointed out that there was a separate chapter on pharmaceutical products which is Chapter 30. Glycerol (Glycerine) was not listed in the category of pharmaceutical products. 5
Mr. Mukherjee emphatically argued that no licence was necessary for import of glycerine. The direction for re export of the consignment was, according to Mr. Mukherjee, patently illegal.
Mr. Bag appearing on behalf of the Drug Control Authorities drew the attention of this Court to the definition of drug in Section 3(b) of the Drugs and Cosmetics Act, 1940 which is set out herein below for convenience:
"3[b) "drug" includes -
(i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes;]
(ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of 1[vermin] or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette;]
(iii) all substances intended for use as components of a drug. "
Section 11 of the Drugs and Cosmetics Act, 1940 empowers the Commissioner and other authorised Customs Officers to detain 6 packages imported in contravention of the Drugs and Cosmetics Act, 1940.
In exercise of the rule making power conferred by the Drugs and Cosmetics Act, 1940 the Drugs and Cosmetics Rules 1945 have been framed. Rule 23 of the Drugs and Cosmetics Rules provide that an import licence in Form 10 shall be required for import of drugs, excluding those specified in Schedule X, and an import licence in Form 10A shall be required for the import of drugs not specified in Schedule X. Mr. Bag submitted that Glycerine is used for diagnosis and treatment and also as an ingredient for drugs and was thus a 'drug' within the definition of drug under the Drugs and Cosmetics Act, 1940. Glycerine not being specified in Schedule X of the Drugs and Cosmetics Rules, 1945, Import licence in Form 10A was required for import of Glycerine.
Mr. Bag referred to Rules 24, 24A and submitted that a Registration Certificate was necessary. However, from Rule 24A it appears that an application for issue of a Registration Certificate is required to be made by the manufacturer having a valid whole sale licence for sale or distribution of drugs under the Drugs and 7 Cosmetics Act or by his authorised agent in India, having a valid licence under the rules to manufacture a drug for sale or having a valid whole sale licence for sale or distribution of drugs.
Mr. Bag submitted that the conditions for grant of licence are specified in Rule 25A. A person aggrieved by an order passed by the Licensing Authority might within 30 days from the date of receipt of an order refusing licence, appeal to the Central Government and the Central Government might, after such enquiry into the matter as it considers necessary, and after giving the appellant an opportunity of making a representation in the matter, make such orders as it deems fit. Rule 26 stipulates the conditions of import licence.
The refined Glycerine imported by the petitioners apparently has USP grading and/or classification as will be evident from the description thereof in the diverse documents disclosed by the petitioners.
Substances capable of multifarious uses including diagnosis treatment or mitigation of ailments or as components of medicines and/or drugs fall within the definition of 'drug' and are governed by the Drugs and Cosmetic Rules, 1945. Rule 23 requires licence in Form 10A for drugs not specified in Schedule X. 8 It is not for this Court exercising its Extra Ordinary Constitutional Jurisdiction under Article 226, to decide factual issues relating to the purposes for which refined Glycerine can be used. Apparently the substance imported is graded as per USP norms, which indicates intention for use as a drug or as an ingredient in a drug.
The judgement of the Madras High Court in S. Kesarimal Vs. Commissioner of Customs (Imports), Chennai-I reported in 2010 (255) ELT 17 (Mad) cited by Mr. Mukherjee is clearly distinguishable on facts. In S. Kesarimal (supra) 'Benfotiamine' was imported by the concerned importer for the specific purpose of use in the manufacture of a dietary supplement. This was not in dispute. Chitra Venkatraman, J. found on facts that in view of Rule 43 read with Rule 123, the petitioner was entitled to import 'Benfotiamine' without licence by reason of the exemption granted. The petitioners have not been granted exemption.
The question of whether the imported item was intended to be used for any of the purposes specified in 3b(i) or 3b (iii) of the Drugs and Cosmetics Act, 1940 cannot be determined by this Court. The real intention of import of the drug cannot definitely be ascertained. 9 In the Bill of Entry the description is Refined glycerine USP minimum 9.5 percent. The purpose of the import is not specified in any of the import documents submitted by the petitioner. This is not a case where import is being effected by a manufacturer of an article other than drug and/or pharmaceutical product for its own use, where intention can conclusively be determined. On the other hand, the product description reflects reference to USP norms and/or standards. Intention might, having regard to the USP marking, be legitimately inferred to be for purposes requiring licence, unless the contrary can be established.
On behalf of the petitioners the action of the respondent authorities of differentiating between manufacturers, who imported Glycerine for their own use for manufacture of products other than drugs and traders, who import for the purpose of sale to third parties has been questioned on the ground that the Act and/or the Rules do not permit such differentiation.
The Rules read with the Act, authorise restrictions on substances intended to be used for certain purposes. When a manufacturer imports for own consumption, the intention is ascertainable. This is not so when traders import for the purpose of 10 sale in the market. If importers and exporters are allowed unrestricted import not for their own consumption, but for sale to third parties, it would be impossible to monitor the end use of the substances. In any case, the interference of the Writ Court is not warranted.
The writ petition, in my view, cannot be sustained and the same is accordingly dismissed.
Urgent certified copy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(INDIRA BANERJEE, J.) K.Banerjee & C. Sinha Assistant Registrars (C.R.)