Madras High Court Calls For Licensing To Import Ayurvedic Drugs, Says Existing Rules Should Be Modified To Prescribe Standards

“As held above, the statute and rules framed thereunder apply to ayurvedic drugs. As regards import, while Rule 23 uses the expression “drugs” and not drugs used in allopathy, the forms referred to therein and in Rule 24 do not apply to the import of ayurvedic or non-allopathic drugs. Therefore, it is necessary for the rule making authority to modify existing rules, prescribe standards and prepare appropriate forms in which applications may be made and import licenses granted to persons importing ayurvedic drugs,” the court said.

Justice Senthilkumar Ramamoorthy noted that there was a strong public element involved in the import of drugs, and it was necessary to regulate non-allopathic medicines also, which could have heavy metal content. Thus, the court stressed the need to modify the existing statutes. It added that the Parliament could, in the alternative, prohibit the import of ayurvedic or other classes of drugs if necessary.

“There is a strong public interest element, specifically public health element, in relation to the import of drugs…It is conceivable, however, that other non-allopathic medicines could have, for example, heavy metal content and, therefore, the need for regulation cannot be disregarded. In the alternative, as a policy measure, it is always open to Parliament to amend the law and prohibit the import of ayurvedic or other classes of drugs, if deemed fit,” the court observed.

The court was dealing with a petition filed by M/s. Axeon Marketing India, which was the authorised importer and distributor of Axe Brand Medicated Oil products in India. The petition was filed against the notices issued by the State Licensing Authority alleging violation of Section 33EEA of the Drugs and Cosmetics Act, 1940 and Rule 154 of the Drugs and Cosmetics Rules, 1945

Section 33EEA deals with ayurvedic drugs which would be deemed to be spurious under certain circumstances. Rule 154 of the Frugs and Cosmetics Rules deals with Form of licence to manufacture Ayurvedic (including Siddha) or Unani drugs.

The company argued that though its products were classified as ayurvedic drugs, the provisions in relation to import of drugs was not applicable to ayurvedic drugs. The company argued that as per Rule 23, import licence should be issued in Form-10 or Form 10A and as per Rule 24, application for import licence should be made in Form-8 or Form-8A with an undertaking in Form-9. The company highlighted that none of these forms were applicable or appropriate for ayurvedic drugs.

The Additional Advocate General however submitted that the definition of drugs under the Act encompasses ayurvedic drugs. It was also submitted that since the Act and the Rules had not specified licensing requirements for ayurvedic drugs, it should be understood that import of ayurvedic drugs is prohibited. The AAG highlighted that in the absence of rules, the courts should not prescribe licensing norms and even if the court was to permit clearance of consignment, it should be subject to the satisfaction of norms prescribed for manufacturing ayurvedic drugs in India.

The court noted that the Rules provided for an import licence to import drugs and no carve out had been made in relation to ayurvedic or other drugs. Thus, the court opined that parliament's intention was to prescribe import license for all drugs.

However, the court also noted that forms prescribed under the Rules are inappropriate for ayurvedic drugs and appropriate only for allopathic drugs. This prompted the court to suggest modifying the existing rules to ensure import license for ayurvedic drugs.

At the same time, noting that the status had not exempted or prohibited the import of ayurvedic drugs, the court noted that it was necessary to ensure that the products were in conformity with the standards prescribed for similar products, manufactured in India.

Thus, the court ordered that the company's consignment should be tested in a laboratory accredited to the Central Drugs Standard Control Organisation (CDSCO), which must be overseen by the licensing authority. The court added that if a satisfactory report is obtained from the laboratory, the authorities should certify that the manufacturing process is in conformity with the process prescribed for the manufacture of ayurvedic drugs in India, and the goods should be released. The court added that the entire exercise should be completed within 8 weeks and the expense for the testing should be borne by the company.

Counsel for Petitioner: Mr. Hari Radhakrishnan

Counsel for Respondents: Ms.Revathi Manivannan, Mr.ARL.Sundaresan, Assisted by Mr.V.Chandrasekaran, SPC, Ms.M.Sneha, Spl. Counsel

Case Title: M/s.Axeon Marketing India v. The Assistant Commissioner of Customs (Group 2) and Others

Citation: 2025 LiveLaw (Mad) 231

Case No: W.P.Nos.8920, 8924 & 8928 of 2025