Case Law Details

Case Name : Commissioner of Customs (Imp.), Nhava Sheva Vs. MediPharma Drug House
Appeal Number : [2014 (11) TMI 151 - CESTAT MUMBAI]
Date of Judgement/Order :
Related Assessment Year :

Medi Pharma Drug House (the Assessee) obtained a licence to import into India the drug named‘ Cyanocobalamin (Vitamin B12) BP/USP/IP’ manufactured by North China Pharmaceutical Victor Co. Ltd. of China (North China Company). Against the said license,the Assessee imported a consignment through Jet Impex International (Jet Impex) in Indent No. Jet/2007/08/49, dated March 14, 2008. However, the goods were supplied by Levachem Co. Ltd. (Levachem), Hong Kong as per the indent which certifies that the goods have been manufactured by North China Company as per licence.

On arrival of the goods, the same were sent to the Drugs and Control Department to obtain NOC wherein it was found that the labels are not matching to the labels of North China Company. Hence, the proceedings were initiated against the Assessee and the goods were confiscated with an option to pay redemption fine of Rs. 25 lakhs and penalty of Rs. 15 lakhs was also imposed. Aggrieved by the Order of the Adjudicating Authority, the Appellant preferred an appeal before the Hon’ble CESTAT, Mumbai. The Revenue also preferred an appeal before the Hon’ble CESTAT, Mumbai on the ground that the absolute confiscation is not ordered rather option for payment of redemption fine is provided to the Assessee.

The Hon’ble CESTAT, Mumbai relied on the decision in case of Oriental Containers Ltd. [(2003 (3) TMI 126 – High Court of Judicature at Bombay] and observed that the Assessee has taken every step to comply with terms and conditions of the licence given by the Drugs and Control Department as the license was granted to import the goods manufactured by North China Company. The license does not cast any duty on the Respondent to import the same directly from the manufacturer.

It was further observed that the Assessee was not having any knowledge of the mis-declaration of the goods as they came to know about the fraud only when the goods were sent to the Drugs and Control Department for obtaining NOC. Thus, confiscation of the goods and penalty on the Assessee was not warranted. Further, since impugned goods have been destroyed in the fire at CFS on January 31, 2010 before the out of charge, question of absolute confiscation or confiscation has become infructuous.

Accordingly, the Hon’ble Tribunal allowed the appeal in favour of the Respondent and dismissed the appeal of the Revenue.

 (Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email:

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October 2020