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TMI Blog2024 (8) TMI 1419X X X X Extracts X X X X X X X X Extracts X X X X ..... s directed against the impugned judgment dated 7th October, 2022, passed by the learned Single Judge in W.P.(C)10143/2022. By the said judgment, the aforesaid writ petition has been allowed and the consignment of the writ petitioner comprising inter alia, 'frames' and 'slides' of handguns, which had been seized by the respondents in the writ petition, has been ordered to be released. BRIEF FACTS AND LITIGATION HISTORY 2. Brief facts relevant for the determination of the issues in the present appeal are set out below: 2.1. The writ petitioner/respondent no. 1 herein, Syndicate Innovations International Limited (hereinafter referred to as "Syndicate") is a public limited company engaged in the manufacture of firearms and ammunitions. Syndicate had obtained a manufacturing license issued by the Ministry of Home Affairs (in short "MHA")/appellant no. 1 herein on 12th March, 2018. 2.2. Section 10 of the Arms Act, 1959 (hereinafter referred to as the 'Act'), prohibits the import and export of arms and ammunitions without a license. Via notification dated 1st November, 2018 issued by the MHA, the powers and functions under Section 10 of the Act with regard to issuance of licences for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Arms Act, 1959 and the Arms Rules, 2016 and the manufacturing license granted by the MHA. The Delhi Police was advised to directly seek further information from the MHA. 2.9. Accordingly, the Delhi Police approached the MHA for appropriate clarifications via communication dated 21st July, 2022. 2.10. The MHA, vide communication dated 3rd August, 2022, issued an advisory wherein it was stated that: i. The definition of 'parts and components' under Rule 2 (37) of the 2016 Rules was an 'inclusive' one; ii. 'Slides' and 'Frames' cannot be pre-fitted with other licensable parts for the purpose of manufacturing as well as import. Since, the license issued to Syndicate was with respect to import of 'frames' and 'slides' alone, Syndicate could not have imported the additional operational parts, viz 'hammer', 'firing pin' and 'extractor'. iii. Additionally, import of arms and ammunitions is also subject to Rule 57 (4) of the 2016 Rules. 2.11. In light of the aforesaid advisory issued by MHA, the import consignment of Syndicate was not released. 2.12. At the hearing before the writ court on 30th August, 2022, it was submitted on behalf of the appellants that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urers Pvt. Ltd. had also filed an appeal being, LPA 25/2023 against the impugned judgment. Vide order dated 18th January, 2024, passed by this Bench, the aforesaid appeal was disposed of, with liberty to the Intervenor to make submissions in the present appeal. 8. An application (C.M.No. 61953/2023) was filed on behalf of Syndicate seeking modification of the order dated 6th February, 2023, and permission of the Court was sought to utilise the imported items in manufacturing finished products, i.e., handguns. In the meanwhile, the MHA vide communication dated 12th February, 2024 permitted Syndicate to commence commercial production. 9. In the aforesaid backdrop, submissions of the parties in the present appeal were heard on several dates. Written submissions have also been filed by the parties in support of their respective arguments. SUBMISSIONS ON BEHALF OF THE PARTIES 10. Mr. Kirtiman Singh, learned CGSC appearing on behalf of the appellant no. 1/MHA has made the following arguments to assail the impugned judgment: I. The interpretation given to Rule 2 (37) of the 2016 Rules in the impugned judgment is erroneous insofar as 'parts and components' are held to be limited to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to provide any evidence to prove to the contrary. Reliance has been placed on the Additional Affidavit filed on behalf of Syndicate wherein industry practice in the form of expert opinions has been placed on record to show that 'frames' and 'slides' come with pre-fitted parts. III. Form VII and Form X-A prescribed in the 2016 Rules cannot be relied by the appellants to submit that Syndicate ought to have obtained a license in respect of the sub-components that were pre-fitted with the import license as the aforesaid forms are in respect of manufacture and export respectively. Import of arms and ammunitions is governed by Form X which does not mention the aforesaid pre-fitted parts, as is correctly observed in the impugned judgment. IV. Form-X license issued ex-post facto to Syndicate on 14th September, 2022, which gave permission to Syndicate to import 'frames' and 'slides', without any exclusions or qualifiers is an admission on behalf of the appellants that import of 'frames' and 'slides' pre-fitted with 'firing pin', 'extractor' and 'hammer' is permissible. V. Rule 57 (4) would not be applicable in the present case as Syndicate has been granted a licence under Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n - Slides 68,500 3. Parts of Handgun - Cylinder 68,500 4. Parts of Air Weapon - Cylinder (Drum) 28,000 5. Parts of Air Weapon - Slide with Barrel 6,500 5. AMMUNITION NA Description NA Weight (in Kgs) or Number NA 6. Purpose for which required Actual User - for Manufacturing of Arms 7. In case of Import, place where article imported are to be stored or deposited Syndicate Innovations International Limited, Plot No. E - 14, Sahibabad, Industrial Area, Site - IV, Ghaziabad, Uttar Pradesh - 201010. 8. Place of despatch and route NA 9. Place of destination NA 10. Name, description and address of the consignee NA 11. Period of validity of Licence 22.10.2022 16. A perusal of the aforesaid Form clearly demonstrates that Syndicate was issued an unqualified and unconditional license to import 'frames' and 'slides', which are parts of handguns, along with other parts and components. The Form neither provides a definition for 'frames' or 'slides', nor does it state that 'frames' and 'slides' cannot be imported with pre-fitted sub components. The Form also does not mention that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate, i.e., 'hammer', 'extractor' and 'firing pin'. Concededly, the appellants did not raise any objection in respect of other sub-components such as 'catch magazine', 'safety lock', 'safety lock support pin', 'trigger', 'trigger action mechanism part', 'spring of firing pin' and 'lock of firing pin', which were pre-fitted inside the 'frames' and 'slides' and also mentioned in the communication dated 21st June, 2022 sent by the Delhi Police to the DGFT. 21. It seems that the appellants objected to 'hammer', 'extractor' and 'firing pin' only because these found mention in the Explanation given in Form VII and Form X-A, whereas the other components were not mentioned therein. The Explanation given in both the forms, being identical, is reproduced hereunder: "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; (q) Extractor; (h) Hammer/Striker." 22. In our view, reliance placed by the appellants on the Explanation provided in the aforesaid Forms is completely misplaced. It is pertinent to note that the aforesaid Forms VII and X-A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a firearm (e.g. barrel, slide, cylinder, bolt, breech lock, firing pin, etc.); ..." 24. A perusal of the above definition reflects that "manufacturing" includes manufacturing of parts and components of firearms as well. What follows is that if any manufacturer in India is desirous of manufacturing 'firing pin', 'extractor', 'hammer' or any other components mentioned in the Explanation of Form VII on a stand alone basis, he would require a separate manufacturing license for the same. 25. Since there can be a possibility of a manufacturer being engaged in the manufacture of only certain sub-components, it necessarily follows that such a manufacturer would also be given the liberty to export the manufactured sub-components. It is in this backdrop that the aforesaid Explanation has been added to Form X-A, which is the form prescribed for exports. 26. Significantly, the aforesaid components such as 'firing pin', 'extractor' and 'hammer' are conspicuously absent in Form X, which is the requisite form for the purpose of import. This would imply that it was not the intention of the appellants that an importer should separately obtain an import license in respect of the aforesaid compo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation or reservation to the effect that such 'frames' and 'slides' are not pre-fitted with other sub-components. iii. The appellants have failed to place any evidence or material on record to demonstrate that 'frames' and 'slides' are not commercially known to exist with pre-fitted sub-components. 29. In light of the aforesaid findings, we are of the view that the objection of the appellants did not stem from Rule 2 (37) of the 2016 Rules. If the definition of 'parts and components' provided in Rule 2 (37) of the 2016 Rules was the basis of objection, the appellants would have also raised objection in respect of other components such as 'catch magazine', 'safety lock', 'safety lock support pin', 'trigger', 'trigger action mechanism part', 'spring of firing pin' and 'lock of firing pin', which were found pre-fitted in the 'frames' and 'slides' imported by Syndicate, as reflected in the communication dated 21st June, 2022 sent by the Delhi Police to the DGFT. Therefore, the issue whether the definition of 'parts and components' under Rule 2 (37) of the 2016 Rules is exhaustive or not, need not detain us. Similarly, we also need not go into the issue whether the pre-fitted componen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under Rule 57 (4) of the 2016 Rules would also not survive. The Form X license granted to Syndicate was unconditional and unqualified and did not refer to any permission that may be required under Rule 57 (4) of the 2016 Rules. Once Form X has been issued by the competent authority, it would amount to a deemed clearance of the competent authority under Rule 57 (4) of the 2016 Rules. 34. We also find force in the submission on behalf of Syndicate that if permission under Rule 57 (4) of the 2016 Rules was required, the same would be required right at the inception, i.e., when import licenses were being issued to them. Such a requirement cannot be brought at a stage when the import consignments have already arrived in India in terms of the import license granted. It is a matter of record that the requirement of permission under 57 (4) of the 2016 Rules was raised for the first time in the advisory issued by the MHA on 3rd August, 2022. Admittedly, there is no separate application prescribed for availing permission under Rule 57 (4) of the 2016 Rules. 35. Even otherwise, the learned Single Judge has rejected the interpretation of Rule 57 (4) of the 2016 Rules as canvassed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 36. We see no reason to interfere with the aforesaid findings of the learned Single Judge. 37. It is relevant to note that Syndicate has also filed an affidavit on 1st July, 2023, giving details of imports made by various manufacturers of main firearm components, without obtaining any import license in Form X. Significantly, the appellants have not rebutted the contents of the said affidavit. 38. Therefore, in our considered view, both the objections taken by the respondent with regard to requirement of a Form X as well as permission under Rule 57 (4) of the 2016 Rules were taken as an afterthought. The ex post facto issuance of the aforesaid Form X amounts to a cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f merits. CONCLUSION AND RELIEF 46. In view of the above discussion, we see no grounds to interfere with the impugned judgment. Accordingly, the appeal is dismissed. 47. Consequently, the limitation imposed on Syndicate via order dated 6th February, 2023, restraining them from disposing of the goods imported by them via Bill of Entry No.9037350 dated 9th June 2022 and Bill of Entry No.9038081 of even date, shall stand dissolved. 48. The present appeal, along with all pending applications, stands disposed of. POSTSCRIPT 49. The present case is illustrative of a complete state of confusion and lack of clarity that prevails in the Government regulations in relation to the arms and ammunition industry. The appellants themselves are not clear about the applicability of different rules in different situations, thereby resulting in the regulatory regime being operated in an arbitrary and ad hoc manner. As highlighted above, there is a complete lack of clarity between the different agencies such as the DGFT, MHA and the Delhi Police with regard to the application of the regulatory regime. 50. In our view, this state of confusion is detrimental to the interest of the entire arms indu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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