Cosmetics Without CDSCO Licence Cannot Sneak Into Indian Territory as "Prohibited Goods"

In a significant ruling reinforcing strict import controls on regulated products, the Bombay High Court has declared that cosmetics brought into India without prior CDSCO registration are "prohibited goods" under the Customs Act. The decision slams the door on attempts to warehouse such shipments for later re-export, holding importers strictly accountable at the point of entry into territorial waters.

When a Cheaper Warehouse Plan Hits Legal Brick Wall

Glamstone Cosmetics Pvt. Ltd., a newcomer in the FMCG and cosmetics trading space, imported three consignments of perfumes, creams, shampoos and similar products from UAE in November 2025. Instead of filing bills of entry for home consumption, the company opted for warehousing bills, citing cheaper storage costs in India versus the UAE and pending CDSCO licence applications filed in May 2025.

The Directorate of Revenue Intelligence (DRI) saw things differently. Acting on intelligence about similar shipments by the same supplier, officers seized the goods under Section 110 of the Customs Act. They cited gross undervaluation, absence of required registration, and what they called a calculated afterthought to circumvent licensing rules by switching to warehousing.

Petitioner's Defence: We Never Intended Domestic Sale

Before the Division Bench of Justices G.S. Kulkarni and Aarti Sathe, counsel for Glamstone argued the imports were bona fide. The warehousing route, they contended, signalled no intent to clear goods for home consumption. Section 69 of the Customs Act, they pointed out, expressly permits re-export of warehoused goods without payment of duty. Allowing re-export at the importer's own cost, they said, caused zero prejudice to revenue while protecting perishable stock with limited shelf life.

Revenue's Counter: The Licence Requirement Travels With the Goods

DRI countered that the Foreign Trade Policy 2023 and Cosmetics Rules 2020 make prior CDSCO registration non-negotiable for any import of cosmetics — whether destined for home consumption or temporary warehousing. The absence of registration transformed the shipments into prohibited goods under Section 2(33) read with Section 111 (d) of the Customs Act. Investigations further revealed mis-declared values running into crores and the petitioner's director had admitted the goods were originally intended for domestic sale.

Bench's Straightforward Application of Law

The Court rejected the petitioner's core submission that warehousing bills of entry magically insulated the goods from licensing mandates. Justices Kulkarni and Sathe held that goods become "imported goods" the moment they enter Indian territorial waters. The statutory definition of prohibited goods expressly incorporates prohibitions under "any other law for the time being in force," thereby sweeping in the Drugs and Cosmetics Act and Cosmetics Rules 2020.

The Bench noted that Section 69 re-export permission applies only to lawfully imported warehoused goods, not to shipments that enter India in violation of mandatory registration requirements. Any other interpretation, the judges observed, would permit importers to flood Indian shores with unlicensed cosmetics merely because warehousing is cheaper locally.

Direct Observations from the Bench on Regulatory Integrity

> "Thus, as per the provisions of Section 10 of the Cosmetics Act, no import of Cosmetics could have been undertaken by the petitioner without a licence, as rightly contended on behalf of the Respondent."

> "The imports in question being per se illegal cannot be labelled to be legitimate or legal, merely because the petitioner intends to re-export the goods and for which no duty according to the petitioner is attracted."

> "Such legislation with the rules framed thereunder prescribe standards to be complied by the drugs being imported, which may be cleared, sold and/or distributed in India. Such products more particularly being imported, concern the health of the people..."

Outcome and Wider Implications

The High Court dismissed the writ petition, upholding the seizure and refusing permission for re-export without adjudication. The ruling sends a clear message: importers cannot bypass critical public-health licensing regimes by routing goods through bonded warehouses. Future consignments of regulated items will face identical scrutiny the moment they cross into Indian waters, regardless of declared end-use or re-export intentions.

The judgment also leaves open questions of valuation methodology for cosmetics, preserving the importer's right to challenge the chartered engineer's report during adjudication proceedings. For now, regulatory compliance remains the gatekeeper, not commercial convenience.