The Drugs and Cosmetics Act, 1940 (“Act”) was enacted with the primary objective of regulating the import, manufacture, distribution, and sale of drugs and cosmetics in India. Its aim is to ensure that these products meet prescribed standards of quality, safety, and efficacy. However, for the Act to be applicable, the product in question must fall within the definition of either a drug or a cosmetic as laid down under the Act.
As per the Section 2(aaa) of the Act which defines cosmetics as any article intended to be used for cleansing, beautifying, promoting attractiveness or altering the appearance and also includes the components of cosmetic.
“2 [(aaa)] ‘cosmetic‘ means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and includes any article intended for use as a component of cosmetic.”
Further, Section 2(b) of the Act defines drugs which suggest it includes medicinal product or a medicament which is meant to treat some medical condition.
“(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 [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 including empty gelatin capsules; and
(iv) such devices* intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette, after consultation with the Board;]”
The key determinant for classifying a product under the Act is its primary intended use. A product may offer both beautifying and therapeutic benefits, but its classification depends on whether it is predominantly used for beautification or for treatment.
Judicial Precedents
The Supreme Court has clarified this principle in several landmark judgments:
1.Puma Ayurvedic Herbal (P)ltd vs Commissioner, Central Excise, Nagpur (2006) 3 SCC 266
“[20] It will be seen form the above definition of “cosmetics” that the cosmetic products are meant to improve appearance of a person, that is, they enhance beauty, whereas a medicinal product or a medicament is meant to treat some medical condition. It may happen that while treating a particular medical problem, after the problem is cured, the appearance of the person concerned may improve. What is to be seen is the primary use of the product……”
This judgement reinforces that even if a product may incidentally enhance appearance, if its main purpose is therapeutic, it will be treated as a drug.
2. P.L. Pharmaceuticals Ltd vs. Collector of Central Excise, Vadodara (1995) Supp (3) SCC 1
In this case also, Hon’ble Supreme Court went into the intended use of the product in order to establish whether such will fall under the category of cosmetics or drugs.
“[27] ……Certainly, the product in question is not intended for cleansing, beautifying, promoting attractiveness or altering appearance. On the other hand, it is intended to cure certain diseases as mentioned supra.”
Thus, if the product’s essential function is to address or manage a medical condition, it falls squarely within the ambit of a drug.
Conclusion
The applicability of the Act hinges on the classification of the product in question as either a drug or a cosmetic. This classification is not merely nominal but based on the intended and primary use of the product. Judicial precedents have consistently upheld this functional approach, focusing on whether the product is designed primarily to beautify or to treat/mitigate a medical condition. This distinction plays a pivotal role in regulatory compliance, product labelling, marketing, and taxation.
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