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TMI Blog2023 (3) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... is the delegatee of the DGFT under the FTDR Act, insofar as the Arms Act is concerned, the power of granting import licence under the said Act has not been delegated. Even during the submissions before this Court when officials from both the authorities have appeared, it is clear that there was a lack of clarity on this matter which led to the issuance of the circular dated 8thFebruary, 2023 by the DDP, which now seeks to clarify all the required forms to be filled, the authorities to deal with the same and the permissions thereof to be granted. The clear position that therefore emerges is that the Petitioner has been issued licences for imports by the DDP. Two consignments have already arrived in India. These two consignments are in respect of licences which are at pages 61 and 64 of the writ petition. Both these consignments are meant for indigenisation of rifle production in India under Technology Transfer Collaboration with LMT Defence, USA, and for indigenisation of shotgun production in India under Technology Transfer Collaboration with Hugul Firearms Cooperative, Turkey. Such imports are crucial and clearly are meant to expedite indigenisation which is an important aspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs- Respondent No.5. 3. The Petitioner is a company engaged in the manufacture of various restricted items including firearms, ammunition and parts thereof. It is the case of the Petitioner that it obtained seven licences from the DDP for import of restricted items from the U.S. and various other countries. The details of the said licences are as under: 4. In terms of the licences dated 24th December, 2021 and 18th April, S. No. Date of Licence Purpose 1 24th December, 2021 Demonstration by Indian Army and own R D. 2 18th April, 2022 For indigenising the shotgun production in India. 3 23rd November, 2021 Ammunition components for assembly and manufacturing into finished cartridges. 4 4th May, 2022 Fitment into the revolvers firearm system. 5 10th June, 2022 For fitment into the pistol system with prototypes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period not exceeding thirty days: Provided that the provisions of Chapter IX shall not apply to goods permitted to be stored in a public warehouse under this section: Provided further that the Principal Commissioner of Customs or Commissioner of Customs may extend the period of storage for a further period not exceeding thirty days at a time. 4. Accordingly, the Petitioner is permitted to make a representation to the Customs authorities for moving the cargo to a recognized warehouse. The same shall be considered and if the documents are found in order, the same shall be processed and decided within 3 days after moving of the representation. 5. List on 6th February, 2023. 6. Interim order already granted shall operate till the next date. 6. Later, there was also a dispute which was raised as to whether there was any recognized warehouse which could store full arms or not. However, today the Court has been informed that the said issue has now been sorted out between the Petitioner and the Customs Department and it is submitted by ld. Counsels that the Petitioner is in the process of shifting the goods to the recognized warehouse as required by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers. Moreover, the insistence of the Respondents upon applications being made in requisite format and issuance of licence in Form X is in terms of Rule 88 of the Arms Rules. Thus, the Petitioner ought to have applied both to the DDP under the FTDR Act as also to the DGFT under the Arms Act and Rules to get the import licence. The Petitioner having not done so, the imports have been rightly stopped by the Customs and Delhi Police. 11. On the last date of hearing, i.e., 20th February, 2023, the Court had directed officials from DGFT, Office of Commissioner of Customs, and Ms. Urmila Rawat, Deputy Secretary, DDP to appear before the Court. Today, in compliance of the said order, Ms. Urmila Rawat, and Mr. Moin Afaque, Deputy DGFT, have appeared before the Court. 12. A specific query from the Court as to whether the stand of the Union of India, as submitted by the ld. CGSC before the Court today, is reflected in the SOP or not. Both the officials submit that there is no reference given to the Arms Act or the Rules in the SOP. The DGFT s stand, however, is that since the MHA requires a licence to be issued under Form X , the importer was well aware that he had to make the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mporter 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. 14. It has further been brought to the attention of the Court that this judgment is the subject matter of LPA No. 695/2022 titled The Ministry of Home Affairs Anr. v. Syndicate Innovations International Limited Ors. and connected matters. In the said matter, vide order dated 6th February, 2023 the importers were permitted to take goods on supratnama but were directed to not to dispose of the said items. The said matters are currently pending before the ld. Division Bench and are stated to be next listed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce items in a time-bound and user-friendly manner, the DDP hereby notifies the following guidelines: 2. ISSUANCE OF IMPORT LICENCE The DDP shall issue the Import Licenses under the following categories- Category 1 : Items for the end use of Indian Armed Forces, DRDO, DPSUs, OFB, MHA, other Government Departments and State governments and Category 2: Items for the purposes of design development, export, repairs, fitment into a system, participation in Tenders/Exhibition, Testing Evaluation. 3. EXEMPTION FROM THE APPLICATIONS OF RULES Agencies/Organizations mentioned in DGFT s Amendment Order, 2017 dated 25.07.2017 (F. No.01/93/180/16/AM-16/PC-2(B)), as amended from time to time, shall be exempted from seeking import authorization of defence items. 4. MODE OF APPLICATION The Indian Manufacturers are required to file applications in ANF1, ANF2M along with the necessary documents [including Appendix 2P (ANF2K(i), Annexure 2(i), (ii) (iii)) for imports from USA. The certificate notified in such documents would continue to be issued by DGFT as agreed under Indo US MOU signed by DGFT]. They would also enclose the copy of Pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tems. Thus, before any commercial sale can be made, an application under Rule 54 of the Rules would have to be made for the purposes of commencement of commercial production and sale. In response, Mr. Budhiraja, ld. Counsel submits that the Petitioner has no intentions to commercially sell the imported restricted goods at this stage and the requisite licences would be taken by the Petitioner before commercial sale is commenced. 21. The clear position that therefore emerges is that the Petitioner has been issued licences for imports by the DDP. Two consignments have already arrived in India. These two consignments are in respect of licences which are at pages 61 and 64 of the writ petition. Both these consignments are meant for indigenisation of rifle production in India under Technology Transfer Collaboration with LMT Defence, USA, and for indigenisation of shotgun production in India under Technology Transfer Collaboration with Hugul Firearms Cooperative, Turkey. Such imports are crucial and clearly are meant to expedite indigenisation which is an important aspect of achieving self-sufficiency for defence purposes. The holding-up of these consignments on procedural grounds, esp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DGFT. 27. The circular dated 8th February, 2023 is extracted herein below for the sake of ready reference: CIRCULAR DATED 8TH FEBRUARY 2023 SUBJECT: Issuance of Import Authorization in Form X-Regarding. The Department of Defence Production issues import license/authorization in accordance with the authority delegated by DGFT only under FTDR Act 1992 vide Order No. 01/93/180/41/AM-17/PC-2(B)/[E-3347] dated 28.05.2018. 2. MHA has issued clarification to DDP in respect of applicability of Section 45 (b)(i) of the Arms Act, 1959 and rule 57(4) of the Arms Rules 2016 w.r.t import of arms ammunition and conveyed that as per the extant provisions of the Arms Act Rules, the following licences/ permissions are required by a manufacturing and/or proof test arms and ammunition: i. Licence in Form VII to manufacture and/or proof-test ii. Licence in Form I to acquire/possess machinery for manufacturing and/or proof-test. iii. Permission of MHA to commence commercial production and proof-test arms and/or ammunition in terms of rule 54 of the Arms Rules,2016. iv. Licence in Form X of the Arms Rules, 2016 for all imports of arms and ammunition i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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