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CDSCO Clarifies Jurisdiction for Compounding of Offences Applications Under Rule 4
A new circular settles which Compounding Authority — Central or State/UT — should receive applications under the Drugs and Cosmetics (Compounding of Offences) Rules, 2025, and what happens when applicants file at the wrong forum.
Background: Why This Clarification Was Necessary
The Drugs and Cosmetics (Compounding of Offences) Rules, 2025 operationalise the compounding mechanism under the Drugs and Cosmetics Act, 1940, allowing certain categories of offences to be compounded on payment of a prescribed compounding fee, in lieu of prosecution. Since India's drug regulatory framework operates on a dual-authority structure — the Central Licensing Authority (CDSCO) for specified categories such as biologicals, vaccines, r-DNA products, blood products, and certain imported/manufactured-for-export drugs, and the State/UT Licensing Authorities for the vast majority of manufacturing, sale and distribution licences — jurisdictional ambiguity in compounding applications was inevitable without explicit guidance.
CDSCO's circular addresses this directly, and the operative logic is straightforward: jurisdiction for compounding follows the authority whose Drugs Inspector drew the sample or whose licensing authority has jurisdiction over the alleged offence — not the applicant's choice of forum.
How Jurisdiction Is Determined
Offence falls within State/UT Drugs Licensing Authority jurisdiction → application goes to the concerned State/UT Compounding Authority.
Offence pertains to Central Licensing Authority matters → application goes to the Central Compounding Authority.
Key Clarifications Issued
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1
Jurisdictional principle: An application must be submitted before the Compounding Authority that has jurisdiction over that specific offence — not filed as a matter of convenience or default.
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2
State/UT-drawn samples: Where a State/UT Drugs Inspector drew the sample and the offence falls under State/UT jurisdiction, the application goes to the concerned State/UT Compounding Authority.
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3
CDSCO-drawn samples: Where a CDSCO Drugs Inspector drew the sample, or the matter falls under Central Licensing Authority jurisdiction, the application goes to the Central Compounding Authority.
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4
Determinative test: The competent authority is fixed by who drew the sample — this single fact resolves jurisdiction under the 2025 Rules.
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Consequence of misfiling: Applications filed before an authority lacking jurisdiction are liable to be returned or rejected, with the applicant advised to refile before the competent authority.
Regulatory Interpretation and Practical Implications
For manufacturers, importers, distributors and licence holders, this circular has direct compliance consequences:
Before initiating any compounding application under Rule 4, establish from the sample memo/inspection records whether the sample was drawn by a Central or State/UT Drugs Inspector — this is now the determinative jurisdictional fact.
A misfiled application will not be transferred; it is liable to be returned or rejected outright, requiring fresh filing before the correct authority — prolonging exposure to prosecution risk.
Firms licensed for categories under Central jurisdiction (specified biologicals, vaccines, blood products, or CDSCO-sampled matters) should route applications to the Central Compounding Authority.
For the majority of manufacturing licences (Schedule M facilities) and sale/distribution offences sampled by State Inspectors, the application must go to the concerned State/UT Compounding Authority.
Compliance and legal teams should correlate each show-cause notice or prosecution reference with the sampling authority, to support correct forum selection at the time of filing.
Conclusion
CDSCO's 21 July 2026 circular removes ambiguity on a procedural point that had been causing avoidable delays for stakeholders seeking to compound offences under the Drugs and Cosmetics (Compounding of Offences) Rules, 2025. The clear takeaway: identify who drew the sample, and file before that authority's corresponding Compounding Authority — Central or State/UT — the first time.
