ICD Clearance at Non-Notified Port Not a Ground to Detain Goods: CESTAT

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that ICD clearance at non-notified ports is not a ground to detain goods. The bench of P. K. Choudhary (Judicial Member) has dismissed the Customs Department’s appeal against an order directing provisional release of imported non-sterile powdered latex examination gloves and has ordered the department to release the goods within seven days. The objections raised by the department regarding classification, labelling requirements, import through a non-notified port, and absence of a CDSCO No Objection Certificate (NOC) did not justify continued detention of the consignment. The dispute arose after M/s Rajat International imported “Non-sterile non-measurable powdered latex examination gloves Class-A” from Malaysia and filed a Bill of Entry at ICD Dadri in August 2025. Customs authorities detained the goods after raising concerns that the products were medical examination gloves requiring compliance with the Drugs and Cosmetics Rules, 1945 and the Medical Devices Rules, 2017. Customs also alleged that the goods had been imported through a non-notified port and that necessary approvals from the Central Drugs Standard Control Organisation (CDSCO) had not been obtained. Following prolonged detention, the importer approached the Allahabad High Court and subsequently sought provisional release under Section 110A of the Customs Act. The application was initially rejected by the Joint Commissioner, prompting an appeal before the Commissioner (Appeals), who directed provisional release of the goods subject to furnishing a bond and a bank guarantee of ₹3 lakh. The Customs Department challenged that order before the Tribunal. Before the Tribunal, the Revenue argued that the importer had deliberately misclassified the goods under Customs Tariff Heading (CTH) 40151900 instead of CTH 40151200 to avoid obtaining a mandatory NOC from the Assistant Drug Controller. According to the Department, examination gloves capable of medical use fell within the more specific tariff heading applicable to medical, surgical, dental, or veterinary gloves and therefore required regulatory scrutiny under the Medical Devices Rules. The Department also relied on a CDSCO communication stating that bills of entry involving surgical gloves or medical examination gloves should be referred to the concerned Assistant Drug Controller to ensure compliance with import requirements applicable to medical devices. Customs contended that the importer’s classification was intended to circumvent these regulatory obligations. A second objection related to alleged deficiencies in labelling. Customs pointed to a laboratory report from the Central Drugs Testing Laboratory, Chennai, which recorded that the samples did not indicate the batch number, manufacturing date, manufacturer’s name, or expiry date. The Department argued that these omissions violated the labelling requirements prescribed under the Medical Devices Rules, 2017 and justified withholding clearance of the goods. The third major ground raised by the Revenue concerned the alleged import through a non-notified port. Customs argued that examination gloves are categorized as medical devices and therefore as “drugs” under the relevant notification issued under the Drugs and Cosmetics Act, 1940. Consequently, the Department contended that such goods could only be imported through ports notified under Rule 43A of the Drugs and Cosmetics Rules, 1945. Since the goods were cleared at ICD Dadri, Customs maintained that the import violated the port restriction. The importer strongly contested all these allegations. It informed the Tribunal that after the Commissioner (Appeals) had recorded findings regarding proper labelling, Customs itself conducted a re-examination of the goods on 15 April 2026. During that re-examination, labels were found affixed on the bulk packaging, and the findings were recorded in a panchnama. The importer argued that the Department failed to disclose this crucial document before the Tribunal despite it supporting the appellate authority’s findings. The importer further submitted that the classification dispute was largely academic because there was no duty implication involved. Customs duty amounting to more than ₹9 lakh had already been paid, and there was neither any allegation of short payment nor any demand for differential duty. Therefore, the dispute had no practical bearing on the question of provisional release. Regarding the port restriction issue, the importer argued that after the introduction of the Medical Devices Rules, 2017, all medical devices became regulated under a separate framework and that the goods had entered India through Nhava Sheva, a notified port. ICD Dadri was merely the location where customs clearance took place and could not be treated as the point of import for the purposes of Rule 43A. After examining the rival submissions, Judicial Member P.K. Choudhary declined to delve into the classification dispute. The Tribunal observed that even if the Department’s preferred classification were accepted, there would be no differential duty and no additional restriction on the goods. Since a show cause notice on classification was already pending adjudication, the Tribunal held that the issue was not relevant for deciding provisional release. The Tribunal also noted that the imported gloves fell within the category of Class-A medical devices. Referring to a notification issued in October 2022, the Tribunal observed that Class-A non-sterile and non-measuring devices are exempt from several provisions of the Medical Devices Rules, 2017, subject to registration requirements, which were undisputedly fulfilled by the importer. On the labelling issue, the Tribunal found significant merit in the importer’s submissions. It noted that the Department itself had conducted a re-examination and found labels affixed on the bulk packaging. The Tribunal remarked that Customs had suppressed this material fact while pursuing the appeal. It further observed that the samples had been drawn from labelled bulk packages and that there was no requirement to affix labels on individual gloves imported in bulk. Consequently, the allegation of non-compliance with labelling requirements was rejected. Addressing the port restriction argument, the Tribunal upheld the findings of the Commissioner (Appeals) that the goods entered India through Nhava Sheva, a notified port, and only came to ICD Dadri for customs clearance. Relying on an earlier CESTAT decision in CC, ICD TKD, New Delhi v. Roshanlal Aggarwal and Sons Pvt. Ltd., the Tribunal held that imports arriving through Nhava Sheva could not be treated as imports through a non-notified port merely because clearance occurred at an inland container depot. The Tribunal further observed that the Department had failed to produce any evidence showing that release of the gloves would pose a risk to public health. On the contrary, the products belonged to the low-risk Class-A category. The Tribunal also noted that similar consignments imported by the respondent under earlier bills of entry had been granted clearance and that CDSCO had not raised substantive objections apart from the labelling issue, which already stood resolved. Holding that all statutory requirements had been satisfied and that the Department’s objections lacked merit, the Tribunal dismissed the Customs appeal and the accompanying stay application. It described the stay application as having been filed in a routine and mechanical manner without merit and directed the Revenue authorities to release the imported goods forthwith within seven days of receipt of the order. Case Details Case Title: Pr. Commissioner of Customs, Noida Versus M/s Rajat International Citation: JURISHOUR-1466-CES-2026(ALL) Case No.: Customs Appeal No.70192 of 2026 Date: 28/05/2026 Counsel For Appellant: Abhishek Mukherjee, Authorized Representative Counsel For Respondent: Naveen Bindal, Advocate Click Here To Read Order Read More: Service Tax Demand on Works Contract Services Upheld: CESTAT

ICD Clearance at Non-Notified Port Not a Ground to Detain Goods: CESTAT

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