Duty-free shops bound by Indian law: Bombay High Court upholds ban on nicotine pouches

Duty-free shops are not exempt from domestic regulatory laws, the Bombay High Court has held, refusing to interfere with the ban on sale of imported nicotine pouches by such outlets at Mumbai’s Chhatrapati Shivaji Maharaj International Airport.

In a judgment passed on Tuesday, a bench of Justices Suman Shyam and Advait Sethna said import of goods into India, even if for the limited purpose of warehousing or re-export, would not enjoy any immunity from the application of the domestic laws.

The order was passed on a petition filed by Mumbai Travel Retail Limited and Flemingo Dutyfree Shop Private Limited, challenging the ban imposed by the Drugs Controller General on the sale of their imported nicotine pouches under the brand names ‘Zyn’ and ‘Fox’.

The authorities have banned the sale of the product over want of licences issued under the Drugs and Cosmetics Act.

“Such goods would be subject to the law of the land and would be governed by the regulatory regime in force even if the transaction takes place in the duty-free shops, beyond the customs barrier,” HC said. If an item is restricted or prohibited under any law currently in force, it would be considered “prohibited goods”.

The domestic regulatory regime will apply in full force to such goods brought into the duty-free shops within Indian territorial jurisdiction, the court said. The bench, however, refrained from deciding whether tobacco-free nicotine pouches are ‘drugs’ under the Drugs and Cosmetics Act and directed the issue to be decided by the Central Drugs Standard Control Organisation.

On April 2, the authorities banned the sale of imported tobacco-free nicotine pouches at the city’s international airport, classifying them as ‘drugs’ under the Drugs and Cosmetics Act, thus making registration certificates and import licences mandatory.

However, the petitioners claimed that the domestic regulatory regime would not apply to the sale of nicotine pouches as they are meant only for consumption by the outbound travellers in the International Departure Terminal.