Unlicensed import of cosmetics is "prohibited goods" under Customs Act, 1962, regardless of intent to warehouse or re-export.

The Petitioner, a trader of cosmetics and FMCG, imported three consignments of assorted toiletries/cosmetics from the UAE in November 2025.

The Petitioner filed Warehousing Bills of Entry under Section 46 of the Customs Act, 1962, asserting that the goods were meant for storage and subsequent re-export due to higher warehousing costs in the UAE and the lack of a mandatory Central Drugs Standard Control Organization (CDSCO) license for home clearance.

The Directorate of Revenue Intelligence (DRI) seized the goods under Section 110 via a Seizure Memo dated 26 November 2025, alleging gross undervaluation (declared at ₹1.64 Cr vs. estimated ₹10.09 Cr) and violation of import policies requiring prior registration.

The Petitioner sought a Writ of Certiorari to quash the seizure and a direction to allow re-export.

1. Whether cosmetics brought into Indian territorial waters without a mandatory CDSCO registration/license constitute "prohibited goods" under Section 2(33) of the Customs Act, 1962.

2. Whether an importer is entitled to re-export goods under Section 69 of the Customs Act if the initial entry into India was in contravention of the Drugs and Cosmetics Act, 1940.

3. Whether filing a Warehousing Bill of Entry (as opposed to a Bill of Entry for Home Consumption) exempts the importer from regulatory compliances at the threshold of import.

The Court applied Section 2(33) of the Customs Act, which defines "prohibited goods" as those subject to prohibition under the Act or "any other law for the time being in force".

This was read with Section 10 of the Drugs and Cosmetics Act, 1940, and Rule 12 of the Cosmetics Rules, 2020, which mandate that no cosmetic shall be imported into India unless the product is registered with the Central Licensing Authority.

The Court also relied on the definition of "import" under Section 2(23) of the Customs Act, being the act of bringing goods into the territorial waters of India.

Precedentially, the Court followed the Madras High Court’s decision in *ALM Enterprises v. Commissioner of Customs*, holding that unlicensed cosmetic imports are "prohibited" and cannot be regularized by mere redemption or re-export.

The Court rejected the Petitioner's argument that "import" is only completed upon clearance for home consumption, clarifying that the legal event of "import" occurs when goods enter Indian territorial waters.

Since Section 10 of the Drugs and Cosmetics Act prohibits the very act of bringing unlicensed cosmetics into India, the goods attained the character of "prohibited goods" the moment they entered the jurisdiction.

The Court found the Petitioner’s claim of "only warehousing for re-export" to be a "complete afterthought" intended to circumvent mandatory safety and regulatory standards.

Furthermore, the Court held that Section 69, which allows the export of warehoused goods, applies only to goods whose initial "import" was legal and compliant with all "other laws".

Allowing prohibited goods to be stored and re-exported simply because warehousing is cheaper in India would undermine public health and the regulatory framework governing goods meant for human use.

It held that the cosmetics were "prohibited goods" under Section 2(33) of the Customs Act due to the lack of a CDSCO license at the time of entry.

Consequently, the goods are liable for confiscation under Section 111(d).

The Court ruled that the Petitioner has no inherent right to re-export goods that were illegally brought into the country in breach of the Drugs and Cosmetics Act.

The issue of valuation was left open for investigation by the Department.