9911796707
Advanced Search 
TMI Blog2022 (10) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 dated 09 June 2022 and Bill of Entry No. 9038081 of the same date, aggrieved by the fact that the said consignments had been withheld by the Customs authorities. When the writ petition was initially entertained the Court had noted that the petitioner had been duly granted the requisite import permission by the competent authority in the office of the Directorate General of Foreign Trade (DGFT). During the course of consideration, it came to the fore that although the petitioner's consignment had been duly inspected by the Delhi Police in terms of the statutory obligation placed by Rule 88(5) of the Arms Rules 2016 (the 2016 Rules), certain queries came to be raised and clarifications were sought from the DGFT. The DGFT in turn is stated to have approached the Ministry of Home Affairs (MHA) for providing appropriate clarifications. When the matter was thereafter taken up on 26 July 2022, the Court was informed that MHA had apprised the DGFT that the petitioner had breached the terms and conditions of the import license. Those issues stand duly highlighted in the order of the Court dated 26 July 2022, which is extracted hereinbelow: "1. Pursuant to the last order passed, Ms. Nidh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for import of Slides and Frames, there existed no legal impediment which would have justified the retention of those goods. In accordance with the procedure prescribed under the Arms Rules, 2016 ["the 2016 Rules"], the Delhi Police appears to have undertaken an inspection of the consignments which form subject matter of the present writ petition and addressed a communication of 21 June 2022 to the Directorate General of Foreign Trade [DGFT]. It referred to the fact that on inspection it found that the Frames which had been imported had the following additional parts already fitted thereto: - a. Hammer b. Catch magazine, c. Safety lock d. Safety lock support pin, e. Trigger Action Mechanism Part f. Trigger Similarly, in respect of Slides, it pointed out that the said article also had the following parts already fitted in each Slide:- i Firing Pin ii. Spring of firing pin iii. Lock plate of firing Pin iv. Extractor The case of the petitioner is that it holds a valid license FOR manufacture of a complete firearm in terms of Form VII which is held and possessed and that consequently it did not require any separate license or permission to manufacture or imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self, Mr. Singh submits that the respondents shall consider the grant of that license ex-post facto in order to regularize the consignment which has been duly imported by the petitioner. Mr. Singh has then relied upon the provisions made in Rule 57(4) of the 2016 Rules to contend that the moment parts of arms and ammunition which cannot possibly be manufactured locally are sought to be imported, the importer is duty bound to move the MHA by way of an application which would in turn obtain the opinion of the Department of Defense before granting an authorization for such import. According to Mr. Singh, this procedure too does not appear to have been followed or enforced by the respondents prior to the grant of import permission. The Court notes that presently the question whether the components of arms which stand embedded to the Frame and Slides are of such a character or quality which cannot be manufactured locally is an issue which is yet to be examined by the respondents. This, the Court notes since the provisions of Rule 57(4) of the 2016 Rules would come into play only if it were found that those parts cannot be manufactured locally. The Court further notes that the Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the DGFT, Customs, the Delhi Police as well as the MHA to attend to the grievance of the petitioner with respect to the thirteen other consignments which are stated to have been detained. For the purposes of enabling the respondents to undertake the aforesaid exercise, the petitioner shall provide the details of the thirteen other consignments which are stated to have been detained forthwith. List again on 15.09.2022." 3. As would be evident from the issues which stood identified in that order, the principal objection which is taken is that the Frames and Slides which have been imported by the petitioner are fitted and integrated with various independent components of a firearm such as trigger, trigger guard, hammer, threaded interfaces etc.. In view of the above and since according to the respondents, the import license stood restricted to a Slide and Frame only, a separate import permission should have been obtained for the additional operational components found fitted thereto. According to them, the aforesaid clearly amounts to a violation of the import permission which was granted to the petitioner. 4. The respondents essentially hold that the parts of a firearm which stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so stated to have been granted a manufacturing license for air weapons on 3 April 2018. Section 10 of the Arms Act 1959 (the Act) places a prohibition on the import and export of arms or parts thereof except in accordance with a license which may be issued in that respect by the competent authority. Undisputedly, the power to issue a license for import stood conferred on the MHA. By a Notification of 22 May 2018, the MHA delegated its powers to the Secretary in the Government of India, Department of Commerce, Ministry of Commerce and Industries. The aforesaid Notification reads thus: - "MINISTRY OF HOME AFFAIRS NOTIFICATION New Delhi, the 22nd May, 2018 S.O. 2049(E).- In exercise of the powers conferred by sub-section (1) of section 43 of the Arms Act, 1959 (54 of 1959), the Central Government hereby directs that the powers and functions exercisable and performed by it under section 10 of the Act and Chapter VI of the Arms Rules, 2016, shall also be exercised and performed by the Secretary to the Government of India in the Department of Commerce, Ministry of Commerce and Industry, subject to the following conditions, namely:- that the Secretary, Department of Commerce, Mini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Defence Production, Ministry of Defence shall observe the policies and instructions laid down by the Central Government in the Ministry of Home Affairs and shall not enunciate any new policy or issue instructions in relation thereto without the prior consent of the Central Government in the Ministry of Home Affairs; and (ii) The Central Government may revoke such delegation of powers and functions or may itself exercise or perform the powers or functions under the said section, if in its opinion such a course of action is necessary in the public interest. [F.No.V-11026/164/2018-Arms] S.C.L. DAS, Jt. Secy." 9. A reading of the aforesaid Notifications would indicate that while the MHA retained its licensing powers insofar as the manufacture of arms and ammunition was concerned, the power to issue licenses for import of arms and ammunition came to be transferred and delegated to the Secretary, Department of Commerce, Ministry of Commerce and Industries of the Union Government. On 23 October 2020 the petitioner came to be granted a license for import by the DGFT. Subsequently, and on 5 May 2021, 30 March 2022 and 24 June 2022, the petitioner was granted authorisations by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be clarified whether the licensee is entitled to import ''frame & slide" with pre-installed operational parts as mentioned at Sl. No. 1 (a to f) and Sl. No. 2 (i to iv)." 12. The query essentially was whether the license to import Frames and Slides would also permit the petitioner to import pre-installed operational parts as noticed hereinabove. The petitioner is thereafter stated to have placed for the consideration of the respondents, a communication received from the Turkish exporter who confirmed that the Frames supplied integrated necessary parts like trigger, trigger guard, hammer, threaded interfaces etc. Since the consignment was not being released, the petitioner on 30 June 2022 instituted the present writ petition. On 4 July 2022, the third respondent again approached the DGFT for appropriate clarifications. DGFT by its letter of 15 July 2022 informed the third respondent that Frames and Slides do not stand specifically defined either under the Foreign Trade (Development and Regulation) Act, 1992 or the Foreign Trade Policy, 2015-2020. They are stated to have proceeded to seek appropriate clarifications from the MHA on 21 July 2022. The MHA in terms of its commun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of manufacturing as well as import under the Arms Rules, 2016. 5. The import authorisation issued by DGF&T as per the documents provided is limited to the import of frames, slides, etc. but does not include hammer, extractor and firing pin. Hence, the said authorisation cannot be interpreted to include the other parts and components which are found by the inspecting authority i.e. Licensing Authority Delhi Police, fitted with the slides and frames imported by the firm. Under the Arms Rules, 2016, hammer, firing pin and extractor are stand alone parts of the handgun, and are licensable for the purpose of manufacturing as well as import. 6. In addition to above the import of arms and ammunition is further subject to the provisions of the rule 57(4) of the Arms Rules, 2016, quote-"the Ministry of Home Affairs may, on an application containing full technical details allow import of such parts of arms and ammunition which are not possible to be manufactured locally, after obtaining the opinion of the Department of Defence Production by grant of an authorisation for such import in accordance with the procedure for import under these rules"-unquote. 7. In view of above, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the MHA to regulate the import and export of arms which stands enshrined in Section 10 of the Act stood duly delegated and conferred upon the DGFT. In view of the above, it was submitted that the petitioner could not be faulted for the respondents having failed to consider the grant of a license additionally in Form X. On a more fundamental plane, it was vehemently argued that there is no justification for the respondents taking the view that the Slides and Frames as imported did not conform to the import permission that was granted. It was submitted that Slides and Frames would clearly fall within the ambit of "Parts and accessories of articles of Heading 9301 to 9304" as set forth in the Indian Trade Clarification based on Harmonized System Classification (ITC (HS)). Learned counsel would submit that once the respondents had accorded the permission for import of Slides and Frames, there existed no legal justification for the validity of those imports being questioned merely because those Slides and Frames came fitted with certain additional components of a firearm. It was urged on behalf of the petitioners that the Explanations which stand appended to Forms VII and X-A and whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Rule 88(5), the inspecting authority is statutorily obliged to examine whether the articles imported are found to be "corresponding with the import license." According to the said respondent, the clarification which was sought from the DGFT, was justified in law and in discharge of the duty cast upon the inspecting authority. 18. Ms. Raman, learned CGSC appearing for the DGFT, has submitted that both, the Act as well as the 2016 Rules provision for parts and components of firearms distinctively. It was her submission that the definition of a "main fire arm component" as contained in Rule 2(29) clearly indicates that a Slide or Frame must mean just that and not any other part or component of a firearm fitted to it. Ms. Raman would submit that the very same purpose is served by the Explanations which stand appended to Forms VII and X-A and which would clearly indicate that the petitioner was obliged to have fairly disclosed that it was not just Frames and Slides which were being imported but also various other components and parts of a firearm. It was the submission of Ms. Raman that the Delhi Police in its communication of 21 June 2022 had clearly recorded that the Slides and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heading 9303 covers firearms and similar devices which operate by the firing of an explosive charge and include sporting shot guns, rifles and muzzle loading firearms, pistols and other devices designed to project signal flares, pistols and revolvers for firing blank ammunition and captive bolt humane killers. ITC(HS) Heading 9304 is the residuary entry and deals with other arms such as spring air or gas guns and pistols and truncheons excluding those falling under Heading 9307. 22. Heading 9305 deals with parts and accessories of articles of headings 9301-9304. The petitioner had placed the articles intended to be imported under Heading 9305. It was further classified as falling under the Heading 93051000 and thus being "Parts and accessories" of revolvers or pistols. The import of these articles admittedly falls within the restricted category. The import of such articles was thus to comply with the provisions contained in Section 10 of the Act and the procedure thereof to be regulated by Rule 88 of the 2016 Rules. 23. Form X appended to the 2016 Rules spells out the general conditions on the basis of which import may be sanctioned. The format thereof is extracted herein below : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing pin, etc.); (iii) ammunition for firearm; or (iv) an arm other than a firearm, and includes ─ (i) reactivating a deactivated firearm; and (ii) substantially modifying the function of a firearm (e.g. conversion to fully automatic), but does not include ─ (i) repair, restoration, maintenance or cosmetic enhancement or alteration of a firearm; nor (ii) the non-commercial reloading of ammunition" From the aforesaid definition of the aforesaid expression, it is evident that it would cover a range of activities stretching from the making, producing or assembling of a complete firearm to a pressure bearing part or component of a firearm. Those parts and components are explained by way of an example to include barrel, slide, cylinder, bolt, breech lock, firing pin, etc. 25. An intending manufacturer of a firearm is obliged to obtain the requisite license in accordance with the provisions contained in Chapter V. The aforesaid Chapter deals with the subject "Manufacturers, Arms dealers and Gunsmiths". In terms of Rule 52, the Licensing Authority may grant a license in Form VII for small arms, light weapons or items configured for military use. The Proviso to Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectors, in which case the licensee shall provide the licensing authority with the names and addresses of each new director, along with the particulars and documents specified in Rule 53 for directors. (10) The licensee shall ensure that all employees who have access to completed manufactured firearms or ammunition within the manufacturing or proof testing facility are technically competent to handle the same. (11) The work in progress and finished goods inventory for each type of firearm and ammunition at any given time shall not exceed two times of the total annual turnover in the last financial year or annual licensed capacity, whichever is lower: Provided that in case of a company having multi-unit facility, total of the annual licensed capacity or total turnover of the company shall be considered. (12) The licensee shall maintain complete database of inventory and distribution chain down to the dealer/end user for domestic distribution and end users in case of export. (13) The licensee shall carry out only batch production in a manufacturing cycle." The Court has deemed it relevant to extract the aforesaid provision bearing in mind the provisions made in sub-rule ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ....district The State Government of .................................. The.......of.........20......... (SEAL) (Signature) Secretary/Joint Secretary To the Government of India Ministry of Home Affairs or Signature and designation of the officer specially empowered to sign the license under Rule 5 Form of renewal of license Date and year of renewal Date on which the renewed licence expires Signature and designation of renewing authority SEAL 1 2 3 4 Explanation.- This Form shall apply to firearms and their following parts, namely:- (a) Barrel; (b) Cylinder; (c) Bolt; (d) Breech Block; (e) Slide; (f) Firing Pin; (g) Frame or Receiver; (h) Extractor; (i) Hammer/Striker. ....." 29. Chapter VI and the provisions contained therein regulate the import and export of arms and ammunition. Since Rules 87 and 88 alone are relevant for the purposes of considering the issues which arise in the present writ petition, they are reproduced hereinbelow: - "87. Licences for import and export of arms and ammunition.-The grant of licences for import and export of arms and ammunition under these rules shall be subject to the provisions of the Foreign Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, who issued the import licence, that the imported firearms or ammunition corresponding with the import licence, have arrived in India. (6) Any delay in carrying out the inspection referred to in sub-rule (5) within seventy-two hours resulting in any additional charges or demurrage shall be attributed to the licensing authority at the port of entry and the customs authority and not the importer licensee." 30. Having noticed the salient provisions incorporated in the Act and the 2016 Rules, it would be apposite to also notice the relevant prescriptions contained in the Foreign Trade Policy 2015-2020, the ITC (HS) as well as the Harmonised Commodity Description and Coding System which were referred to by learned counsels for parties and which would have some bearing on the question that stands raised. The FTP in Chapter 9 defines the words "accessory" or "attachment" as follows: "Accessory" or "Attachment" means apart, sub-assembly or assembly that contributes to efficiency or effectiveness of a piece of equipment without changing its basic functions." 31. Chapter 93 of the ITC (HS) titled "Arms and Ammunition; Parts and Accessories thereof", prescribes that the import of arms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration." 33. The respondents had also placed for the consideration of the Court the provisions with respect to arms and ammunition under the HS for the purposes of their argument that each component of a firearm is liable to be recognised independently. In support of the aforesaid submission, they had placed for the consideration of the Court the HS 2016 Edition, the relevant parts whereof are reproduced hereinbelow: - "93.05- Parts and accessories of articles of headings 93.01 to 93.04. 9305.10 - Of revolvers or pistols 9305.20 - Of shotguns or rifles of heading 93.03 - Other: 9305.91 - - Of military weapons of heading 93.01 9305.99 - - Other" The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Chapter as it presently stands is reproduced hereinbelow:- "Heading H.S. Code 93.05 Parts and accessories of articles of headings 93.01 to 93.04. 9305.10 - Of revolvers or pistols 9305.20 - Of shotguns or rifles of heading 93.03 - Other: 9305.91 -- Of military weapons of heading 93.01 9305.99 -- Other 36. It would also be pertinent to note that the principles of interpretation which would apply to classification entries contained in the HS have also been codified. The relevant parts of the General Rules for the Interpretation of the Harmonised System (HS Interpretation Rules) are placed hereunder: - "3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low: - "(29) "main firearm component" means the barrel, frame or receiver, slide, bolt or breech-block of a firearm; (37) "parts and components" mean any element or replacement element specifically designed for a firearm and essential to its operation and includes barrel, frame or receiver, slide or cylinder, bolt or breech block, and any device designed or adapted to diminish the sound caused by firing;" 39. Heading 9305 of the ITC (HS) compendiously classifies all parts and accessories of arms under one umbrella entry. The Court in the earlier parts of this decision had also noticed the provisions made in Chapter 9 of the FTP and which had defined the word "Accessory" and "Attachment" to mean a part or sub-assembly or assembly that contributes to efficiency or effectiveness of a piece of equipment. It would also be pertinent to highlight and underline the fact that Form X does not independently classify parts and components of a firearm in contradistinction to Form VII. In fact, the Explanation which stands inserted in Form VII is conspicuously absent from Form X. Regard must also be had to the fact that the Explanation which stood added to Form VII with effect from 01 Novem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical colleges. An indication about such an intention is, however, given in the Rules wherein the expression 'college' has been defined in Rule 2(b) to mean and include Arts and Science College, Teachers' Training College, Physical Education College, Oriental College, School of Institute of Social Work and Music College. While enumerating the various types of colleges in Rule 2(b) the rule-making authority has deliberately refrained from including professional and technical colleges in the said definition. It has been urged that in Rule 2(b) the expression "means and includes" has been used which indicates that the definition is inclusive in nature and also covers categories which are not expressly mentioned therein. We are unable to agree. A particular expression is often defined by the Legislature by using the word 'means' or the word 'includes'. Sometimes the words 'means and includes' are used. The use of the word 'means' indicates that "definition is a hard-and-fast definition, and no other meaning can be assigned to the expression than is put down in definition". (See : Gough v. Gough [(1891) 2 QB 665 : 60 LJ QB 726] ; Punjab Land Development and Reclamation Corpn. Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not so covered." 42. The aforesaid principle was reiterated and lucidly explained in a more recent decision in Pioneer Urban Land and Infrastructure Ltd. Vs. Union of India (2019) 8 SCC 416. In Pioneer Urban, their Lordships were considering the correctness of the view expressed in Krishi Utpadan Mandi Samiti Vs. Shankar Industries 1993 Supp (3) SCC 361 where their Lordships had taken the view that the definition of the expression 'agricultural produce' was not exhaustive even though it employed both the words means and includes. Disagreeing with the view expressed in the latter, their Lordships in Pioneer Urban held as under: - "81. On the other hand, the learned Additional Solicitor General countered this submission by reference to Krishi Utpadan Mandi Samiti v. Shankar Industries [Krishi Utpadan Mandi Samiti v. Shankar Industries, 1993 Supp (3) SCC 361 (2)], where, at paras 5 and 12, this Court held : (SCC pp. 363 & 364) "5. Section 2(a) of the Act defines "agricultural produce" and reads as under: reads as under: '2. (a) "agricultural produce" means such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisciculture, animal husb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 23 and State of W.B. v. Associated Contractors [State of W.B. v. Associated Contractors, (2015) 1 SCC 32 : (2015) 1 SCC (Civ) 1] , SCC para 14, this Court has held that wherever the expression "means" is followed by the expression "and includes" whether with or without additional words separating "means" from "includes", these expressions indicate that the definition provision is exhaustive as a matter of statutory interpretation. It has also been held that the expression "and includes" is an expression which extends the definition contained in words which follow the expression "means". From this discussion, two things follow. Krishi Utpadan Mandi Samiti [Krishi Utpadan Mandi Samiti v. Shankar Industries, 1993 Supp (3) SCC 361 (2)] cannot be said to be good law insofar as its exposition on "means" and "includes" is concerned, as it ignores earlier precedents of larger and coordinate Benches and is out of sync with later decisions on the same point. Equally, Dr Singhvi's argument that clauses (a) to (i) of Section 5(8) of the Code must all necessarily reflect the fact that a financial debt can only be a debt which is disbursed against the consideration for the time value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an entity may be engaged in the manufacture of either a complete firearm or merely a part or a component thereof. It is to take care of the aforesaid contingency alone that the Explanation appears to have been added in Form VII. Additionally, the use of the expressions "eg." and 'etc." in Rule 2(31) appears to be indicative of the intention of the framers to refrain from exhaustively or comprehensively specifying the various parts and accessories of a firearm. This provision is indubitably distinct from the manner in which Rules 2(29) and 2(37) stand crafted. Ultimately, it is the meaning liable to be ascribed to "main firearm component" and "parts and components" thereof as contained in the aforenoted two statutory provisions which would govern. 45. This Court is thus of the considered opinion that merely because some of the sub-parts or components of a firearm are separately chronicled in the Explanation to Form VII, that would not lend credence to the contention that a Slide or a Frame when imported cannot be one which may come fitted with an additional component or part of a firearm. The Court also bears in mind that catch magazine, safety lock, safety lock support pin, trig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted onto it. It would also be apposite to recollect the provisions contained in Rule 3(b) of the Tariff Interpretation Rules which prescribes that in case of composite goods which may be made of different components, they shall be classified as if they consisted of the components which gives them their essential character. It was thus incumbent upon the respondents to have established that the additional components and operational parts found fixed to the Frames and Slides were liable to be separately classified and that the ITC (HS) did not envisage a Frame or a Slide being pre-fitted with any additional component. As this Court views the relevant provisions made in the FTP and ITC (HS), it finds itself unable to either appreciate or sustain the bifurcation of the product which was imported as suggested by the respondents. The ITC(HS) in Heading 9305 compendiously classifies all parts and components of a firearm. No provision of the FTP or the ITC(HS) seems to suggest that the parts which were noticed in the communication of 21 June 2022 are either recognised as independent components under the statutory regime which governs or that the policy of import forbids parts and accessor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been reiterated. The application of the common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law- maker; "[i]t is an attempt to discover the intention of the legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts." (See Oswal Agro Mills Ltd. [1993 Supp (3) SCC 716] , SCC p. 721, para 4.) 21. A classic example on the concept of common parlance is the decision of the Exchequer Court of Canada in R. v. Planters Nut and Chocolate Co. Ltd. [1951 CLR 122 (Can)] The question involved in the said decision was whether salted peanuts and cashew nuts could be considered to be "fruit" or "vegetable" within the meaning of the Excise Tax Act. Cameron, J., delivering the judgment, posed the question as follows: "... Would a householder when asked to bring home fruits or vegetables for the evening meal bring home salted peanuts, cashew or nuts of any sort? The answer is obviously 'no'." Applying the test, the Court held that the words "fruit" and "vegetable" are not defined in the Act or any of the Acts in par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts geological sense but in the sense as ordinarily understood and would include 'charcoal' in the term 'coal'. It is only when the question of the kind or variety of coal would arise that a distinction would be made between coal and charcoal; otherwise, both of them would in ordinary parlance as also in their commercial sense be spoken as coal." 24. In Dunlop India Ltd. v. Union of India [(1976) 2 SCC 241], at p. 251, while holding that VP Latex was to be classified as "raw rubber" under Item 39 of the Indian Tariff Act, 1934, this Court observed: (SCC pp. 252-54, paras 29 & 34) "29. It is well established that in interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the trade and its popular meaning should commend itself to the authority. *** 34. We are, however, unable to accept the submission. It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gid interpretation in terms of scientific and technical meanings should be avoided in such circumstances. This, however, is by no means an absolute rule. When the legislature has expressed a contrary intention, such as by providing a statutory definition of the particular entry, word or item in specific, scientific or technical terms, then, interpretation ought to be in accordance with the scientific and technical meaning and not according to common parlance understanding." 50. Tested on the aforesaid principles, it was incumbent upon the respondents to have placed material on the record to establish that a Frame or a Slide is, in an industrial or commercial sense, not recognised to be an article fitted with any other component of a firearm. In order to sustain the submission that the terms of the import permission were violated, it was imperative for the respondents to have proven that Frames and Slides are not understood or envisaged to be fitted with other operational parts of a firearm. Since the burden to prove a violation of the import permit lay squarely on their shoulders, it was necessary for them to establish that Frames and Slides when referred to in industrial or trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The respondents have also failed to establish that under the prevalent import policy, the "operational parts" which were found fitted to the Frames and Slides required permissions being obtained separately and independently. The Court also bears in mind that the respondents have at no stage of these proceedings questioned the value declarations which were made by the petitioner. It also bears in consideration the certification issued by the exporter who had asserted that the Frames and Slides had been supplied with other integrated necessary parts of the aforesaid articles. 54. The respondents have failed to prove that Frames and Slides as commonly understood or construed in industry or trade circles are not envisaged to be pre-fitted with additional components of a firearm. The respondents have thus failed to establish that the imported items would fall foul of the common parlance or the functionality tests as commonly deployed in such situations. 55. That takes the Court then to the advisory which was issued by the MHA and which apart from expressing the opinion that the Frames and Slides which were imported were in violation of the import permission which was granted, had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... license to manufacture any of its individual components as specified in clauses (a) to (i) of the Explanation to Form VII. The further conclusions which are recorded in the advisory of the MHA and more particularly in Para 5 thereof again proceed on the premise that the import of Frames and Slides must necessarily be understood to mean that they would not be embedded with any additional parts and components of a firearm. That contention, for reasons aforenoted, the Court has been unable to countenance or accept. 57. That takes the Court finally to the question of whether Rule 57(4) of the 2016 Rules would have any application to the facts of the present case. As was argued by learned senior counsel appearing for the petitioner, and in the opinion of this Court correctly, the obligation to approach the MHA in terms of Rule 57(4) would arise only if a person were contemplating importing parts of arms and ammunition which are not possible to be manufactured locally. Rule 57(4) thus stands confined to those cases where the part or component which is sought to be imported is not being manufactured or cannot possibly be manufactured in the country. However, in the present case it was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parts of arms were such as were not being manufactured locally, the importer would still be obliged to follow the route of Rule 57(4). Quite apart from the fact that the aforesaid view was neither advocated by the MHA nor the DGFT and is not the stand reflected in their orders or the affidavits filed in these proceedings, the acceptance of this line of argument would give rise to an irreconcilable conflict between Rule 57(4) and Rule 88 of the 2016 Rules and be contrary to the letter of the delegation notifications issued by the MHA. In any case the act of the respondents in granting the Form X license subsequently and during the pendency of the writ petition is clear evidence that they do not view the import in question being prohibited on lines as suggested by and on behalf of the Intervener. 60. The conclusion of the Court that it would be wholly erroneous to read or interpret Rule 57(4) in the manner as suggested by the Intervener is further fortified when tested in light of the provisions of the 1992 Act. Section 3(2) of the said enactment confers a power on the Union Government to "prohibit", "restrict" or "regulate" the import or export of goods, services or technology. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the vires of Exports (Control) Fifteenth Amendment Order, 1979 prohibiting pre-ban commitments was in question. It was held that there was no ground to discredit the policy. The question raised therein viz. the effect of failure to honour foreign contracts owing to change in law imposing ban on goods covered thereby whether would attract the plea of frustration of contract was not decided stating: (SCC p. 710, para 9) "This contention may have to be considered here or elsewhere, but, if we may anticipate our conclusion even here, this question is being skirted by us because the kismet of this case can be settled on other principles. The discipline of the judicial process forbids decisional adventures not necessary, even if desirable." would mean to control or to adjust by rule or to subject to governing principles (see U.P. Coop. Cane Unions Federations v. West U.P. Sugar Mills Assn. [(2004) 5 SCC 430] ) whereas the word "prohibit" would mean to forbid by authority or command. The expressions "regulate" and "prohibit" inhere in them elements of restriction but it varies in degree. The element of restriction is inherent both in regulative measures as well as in prohibitive or pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subject of import of arms would have to ensure that compliances are affected not just with reference to the 1992 Act but also the Act and the 2016 Rules. 64. The writ petitioner has also sough reliefs with respect to the liability of demurrage which has come to be foisted upon it on account of the controversy which arose in respect of the shipment in question and formed subject matter of the instant writ petition. However the Court notes that the liability to bear demurrage charges shifts from the importer to the licensing and the customs authorities if any delay be caused in inspecting the consignment as per Rule 88(6) of the 2016 Rules. The third respondent however in the facts of the present case cannot be called upon to shoulder that liability since it had dutifully inspected the consignment within the time specified in Rule 88(6). That authority has thus not caused any delay so as to warrant any directions being framed against it and as claimed in the writ petition. More fundamentally and bearing in mind the contentious questions which came to be raised, the facts of the present case would not warrant the grant of relief (d) as claimed in the writ petition. 65. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
