Authority: High Court of Judicature at Bombay

Order Date: 22 September 2026 (pronounced); Reserved on 7 August 2026

Case Overview

  • Petitioners: (i) Mumbai Travel Retail Ltd (registered office in Ahmedabad, operating a Duty Free Shop at Chhatrapati Shivaji Maharaj International Airport, Mumbai) and (ii) Flemingo Dutyfree Shop Private Limited (registered office in Navi Mumbai, also operating a Duty Free Shop at the same airport).
  • Respondents: Union of India (through the Secretary, Ministry of Health and Family Welfare), the Drug Controller General (I) – CDSCO, Assistant Drugs Controller (I) – International Air Cargo Complex, Mumbai, and the Principal Commissioner of Customs, Chhatrapati Shivaji Maharaj International Airport, Mumbai.
  • Subject Matter: Both petitioners sell imported “tobacco‑free nicotine pouches” under the brand names “ZYN” and “FOX” in the Departure Terminal of the airport. The authorities banned the sale, alleging the products are “drugs” under the Drugs and Cosmetics Act, 1940 and that the petitioners lack the required import licence and registration certificate.
  • Chronology:
  • 3 Oct 2025: Complaint lodged by “Mothers Against Vaping” (MAV) alleging health hazards.
  • 10 Oct 2025: Respondent No. 4 (Customs) issued Notice F.No.ARPT/WH/MISC/81/2025‑DFS demanding details of legality.
  • 15 Oct 2025: Petitioners replied, claiming the DFS is beyond the customs frontier and domestic licences are unnecessary.
  • 10 Nov 2025: Respondent No. 4 requested Bill of Entry, exemption notification, and NOC.
  • 13 Nov 2025: Petitioners submitted Bill of Entry, citing DGFT “free classification” (HS 24049100) and stating the goods were for duty‑free sale.
  • 15 Dec 2025: Respondent No. 4 issued a reminder, objecting to the description “ZYN” instead of “Nicotine Pouches”.
  • 2 Jan 2026: Petitioners explained the description matched the supplier invoice and that customs had physically examined the goods.
  • 5 Mar 2026: Assistant Drugs Controller (No. 3) conducted an investigation and, on 2 Apr 2026, issued an order banning sale, stating the products are “drugs” under Section 3(b) of the Drugs and Cosmetics Act, 1940 and that a licence is mandatory.
  • 8 Apr 2026: Assistant Commissioner, DFS Bond, CSMI Airport communicated that the nicotine pouches are “drugs” and advised the petitioners to obtain CDSCO approval, otherwise halt sales.
  • 24 Jun 2026: The Court passed an ad‑interim order restraining respondents from coercive action against existing stock, while import remained suspended.
  • Legal Submissions:
  • Petitioners (via Senior Advocates Janak Dwarkadas and Arunabh Chowdhury) argued that goods stored in customs warehouses and sold in DFS are outside the customs barrier for regulatory purposes; cited Supreme Court decisions in Hotel Ashoka and Garden Silk Mills and contended that only fiscal levies are applicable.
  • Respondents (via Additional Solicitor General Anil Singh) argued that consumption occurs on Indian soil, invoking health‑hazard concerns, and that the definition of “outside customs frontier” does not shield DFS from domestic health regulations.
  • Petitioners also relied on Glamstone Cosmetics Pvt. Ltd. v. Union of India (which held that goods imported into Indian territorial waters are subject to all applicable laws, not just customs duties).
  • Statutory Provisions Discussed:
  • Customs Act, 1962 (definitions of “customs airport”, “customs area”, “import”, “imported goods”, “India”, “Indian customs waters”, “prohibited goods”).
  • Drugs and Cosmetics Act, 1940 (Section 3(b) definition of “drug”, Section 10 prohibition of import without licence, Section 18 prohibition of manufacture/sale).
  • Rules 123, Schedule K (exemption for nicotine gum/lozenges up to 2 mg), Rule 43 & Schedule D (exemption for non‑medicinal substances), DGFT Notification No. 54/2015‑2020 (free classification of nicotine‑containing tobacco products).
  • Relevant case law: Hotel Ashoka, Garden Silk Mills, Glamstone Cosmetics, Chimanlal Sheth v. State of Maharashtra, State of Andhra Pradesh v. Linde India Ltd, among others.

Final Outcome

  • The Court answered the first question in favour of the respondents: immunity for DFS transactions is limited to fiscal measures; domestic health‑regulatory regime applies to nicotine pouches.
  • The second question – whether nicotine pouches fall within the definition of “drug” under Section 3(b) and thus require an import licence/registration – was left open for determination in a separate proceeding.
  • The Court ordered that the petitioners may file representations to the CDSCO within four weeks of the judgment upload, and the authority must decide those representations within thirty days, giving a personal hearing if required.
  • No costs were awarded, and the writ petitions were disposed of accordingly.

Topics: Regulation, Health, Customs