TMI Blog2022 (10) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... nal parts which were found to be fitted to the Slides and Frames were liable to viewed as independent components of a firearm and for which a separate import permission was liable to be obtained. This submission was addressed in the backdrop of the definition of main firearm component set out in Rule 2(29) and the phrase parts and components as defined by Rule 2(37). The respondents also sought to draw sustenance from the Explanation appended to Form VII which, according to them, is an additional indicator of the petitioner being placed under an obligation to have made requisite declarations that additional parts and components of a firearm were also proposed to be imported. This Court finds itself unable to interpret Rules 2(29) and 2(37), in a manner which may lend credence to the submission that a Frame or a Slide must, for the purposes of import, be understood to mean an article which does not have any other component or part of a firearm embedded in them. It must at the outset be noted that the expression main firearm component has been defined in Rule 2(29) to mean the barrel, frame or receiver, slide, bolt or breach block of a firearm. Rule 2(37) while defining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1992 Act, the FTP and the ITC(HS), this Court finds itself unable to hold that the restrictive regime relating to import of firearms comprehends a prohibition in respect of items which are being manufactured locally. The respondents are directed to release the consignments - Petition allowed. - W.P.(C) 10143/2022, CM APPL.41728/2022 (Intervention) - - - Dated:- 7-10-2022 - HON'BLE MR. JUSTICE YASHWANT VARMA Petitioner Through: Mr. Joy Basu, Senior Advocate with Mr. Bhupesh Narula, Ms. Kanak Bose, Mr. Anugrah Ekka, Mr. Swetabh Sharma, Mr. Rishabh Varshney and Ms. Rinku Narula, Advocates. Respondents Through: Mr. Anuragh Ojha, Mr. Deepak Somani, Advs. for R-1 Ms. Nidhi Raman, CGSC with Mr. Zubin Singh, Adv. for DGFT Mr. Shashi Pratap Singh, Ms. Abhilasha, Ms. Garima Chauhan, Advs. for R-3 with Insp. Vinay, Licensing Unit., Delhi Police. Mr. Kirtiman Singh, CGSC with Ms. Kunjala Bhardwaj, Ms. Vidhi Jain, Mr. Madhav Bajaj, Mr. Yash Upadhya, Mr. Sujeet Kumar, Advs. for R-4. Mr. Jai Sahai Endlaw, Mr. Shashank Khurana, Advs. for Intervenor. J U D G M E N T 1. The petitioner, a manufacturer of arms has approached this Court seeking release of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sifies firing pins , frame , extractor and hammer/striker separately and individually. In view of the above, it is their stand that the petitioner has not adhered to the license for the import which had been issued. 4. Bearing in mind the nature of issues which stand raised, let the noticed respondents file their replies to the writ petition within a period of one week from today. 5. List again on 05.08.2022. 2. After exchange of pleadings, the matter was thereafter extensively heard on 30 August 2022. Since that order captures the essence of the dispute which has arisen, the same is extracted hereinbelow: - Having heard learned counsels for parties at some length, the Court notes that the present writ petition gives rise to the following issues. The petitioner had approached this Court aggrieved by the fact that arms and parts of arms which had been imported by him pursuant to permission granted by the respondents were not being released. The Bills of Entry with which the present writ petition is concerned are as follows: - I. Bill of Entry no. 9037350 dated 09/06/2022 for 500 Frames. II. Bill of Entry no. 9038081 dated 09/06/2022 for 500 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined that the import permission which had been granted would not cover parts or components of a firearm which were found fitted to the Frame and the Slide. It has additionally referred to the provisions contained in Rule 57(4) of the 2016 Rules. Both Ms. Raman and Mr. Singh, learned CGSCs have sought to justify the position as set out in the counter affidavit as well as the advice proffered by MHA. They would contend that the import permissions stood restricted to a Slide or the Frame alone and that consequently the import permission cannot be viewed as permitting the petitioner to import a Frame or a Slide with additional parts fitted to it. It was also pointed out to the Court that the provisions contained in the 2016 Rules and more particularly Rule 88(2) thereof require an importer to obtain a requisite license in terms of Form X which stands placed and appended to those Rules. It was contended that no such license was obtained. Mr. Singh would contend that while the powers of the Licensing Authority under the Act may have been duly delegated to the DGFT in terms of the notification of 01 November 2018, that would not absolve the petitioner from the additional requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also takes note of the contention of learned counsel for the petitioner who submits that the expression manufacturing as defined in Rule 2(31) would clearly indicate that it is permissible for a person to manufacture or produce either a complete firearm or a component thereof. Referring then to the provisions contained in Rules 2(29) and 2(37) of the 2016 Rules as well as the Explanation added to the statutory forms, it was submitted that the amendments to those forms in terms of which various of components of firearms have come to be inserted and added, is merely to meet the contingency where a person may choose to manufacture or import only a particular component or a part of a firearm rather than the complete firearm. Viewed in that backdrop, learned counsel for the petitioner would submit that the perceived requirement of a separate license or import permission being obtained for those components also cannot be countenanced. Bearing in the mind the aforesaid facts, the Court in the interim passes the following directions. In light of the suggestions mooted by Mr. Singh, learned CGSC, let the competent authorities in the MHA as well as the DGFT jointly consider the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Rule 88(2) under the 2016 Rules. It was their submission that the requirement of that license being obtained is in addition to and notwithstanding the permission to import as accorded by DGFT to the petitioner. However, the respondents in the course of their submissions fairly conceded that since the same constituted an inadvertent lapse and a procedural lapse on their part, the petitioner may be called to apply for that license and an ex-post facto grant would be duly considered. That license has since been granted to the petitioner. 6. The question which therefore arises is whether the stand taken by the respondents that since the Frame and the Slide had various identifiable components of a firearm embedded to it, the terms of the import permission stood violated is sustainable in law. The second issue which arises for consideration is whether the petitioner was obliged to have obtained the prior permission of the MHA as contemplated under Rule 57(4). For the purposes of considering the aforesaid questions, it would be necessary to note the following salient facts. 7. The petitioner was granted a manufacturing license for firearms and ammunition by MHA on 12 March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification which came to be issued on 01 November 2018 and which reads as follows:- MINISTRY OF HOME AFFAIRS NOTIFICATION New Delhi, the 1st November, 2018 SO. 5607(E)- In exercise of the powers conferred by sub-section (1) of section 43 of the Arms Act, 1959 (54 of 1959), and in supersession of the notification of the Government of India, Extraordinary, Part-II, Section 3, Sub section (ii) vide S.O. 2049(E), dated the 22nd May, 2018 the Central Government hereby directs that, the powers and functions which are exercised and performed by it under section 10 of the said Act, shall also be exercised and performed by the following officers, namely:- (a) the Secretary to the Government of India in the Department of Commerce, Ministry of Commerce and Industry or an officer authorised by him in this behalf for import of Arms and Ammunition as specified in Schedule I of Arms Rules, 2016; (b) the Secretary to the Government of India in Department of Defence Production, Ministry of Defence or an officer authorised by him in this behalf for export of Arms and Ammunition as specified in Schedule I of the Arms Rules, 2016. 2. The powers and functions under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Upon the consignment arriving in the country, the petitioner is stated to have communicated a request to the Delhi Police to inspect the consignment on 13 June 2022. The consignment is stated to have been inspected by the Delhi Police on 15 June 2022 which thereafter and by a communication of 21 June 2022 sought clarification from the DGFT. That clarification was sought upon the third respondent finding that the 500 pieces of Frames were also found to be fitted with the following components: - a. Hammer b. Catch magazine, c. Safety lock d. Safety lock support pin, e. Trigger Action Mechanism Part f. Trigger Insofar as Slides were concerned, a similar query was raised with the third respondent notifying DGFT that those were found to be fitted with the following components: i. Firing Pin ii. Spring of firing pin iii. Lock plate of firing Pin iv. Extractor 11. The third respondent thereafter framed the following query for the consideration of the DGFT- Armourer/licensing Unit observed that the item captioned parts of handgun-frame already installed with the operational parts mentioned at Sl. No. 1 (a to f) and the item capti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment of India, Department of Commerce, Ministry of Commerce and Industry or an officer authorised by him in this behalf for the issuance of import licence for the arms and ammunitions as specified in the Arms Rules, 2016, and accordingly, DGF T issues import authorisation in this behalf. 2. As per rule 2(37) of the Arms Rules, 2016, the term parts and components has been defined as 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; 3. As evident, the above is an inclusive definition, and each part and component of a firearm is a separate part or component unless so specified under the Arms Act, 1959 and the Arms Rules, 2016. The issue in contest is relating to the request/application of import filed by M/s Syndicate Innovations International Ltd. for the following items: (a) Parts of Handguns-Frame (b) Parts of Handguns-Slide, etc. 4. From the description of the items above, it is amply clear, by plain reading, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signment. As was noticed by the Court in its order of 30 August 2022, the respondents had also raised the issue of the petitioner having not obtained the requisite license as contemplated under Rule 88(2). It had also noticed the stand of the MHA with Mr. Singh, learned CGSC, submitting that although the DGFT appeared to have granted permission for import without bearing in mind the aforesaid statutory requirement, it would consider the grant of that license ex-post facto in order to regularise the import. By the time this writ petition was taken up for final hearing, the Court was informed that the aforesaid license had been duly granted in favour of the petitioner. 14. Post 30 August 2022 and when the matter was again taken up for consideration, the respondents contended that notwithstanding the grant of the import license in Form X as provisioned for under Rule 88(2), the petitioner would not stand absolved of its obligation to obtain the requisite permissions from MHA in terms of the provisions contained in Rule 57(4). It was on the applicability of the aforesaid provision that elaborate submissions were addressed by the respondents thereafter. However, before proceeding dow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The contention essentially was that as long as a Slide or Frame fell within the scope of the aforesaid definitions, the mere fact that it constituted an amalgam of more than one component of a firearm could not be said to be a violation of the import permission that was granted. The petitioners then submitted that Rule 57(4) can clearly have no application since it is not the case of the respondents that the imported articles could not be possibly manufactured locally. It was urged that sub-rule (4) of Rule 57 would only apply and oblige an importer to approach the MHA only in case the import of parts of arms and ammunitions are not possible to be manufactured locally . In any case, learned Senior Counsel appearing for the petitioner would contend that once the import had been duly sanctioned by the DGFT, the refusal to release the consignment based upon a subsequent advisory which may have been issued by the MHA is wholly arbitrary and illegal. 17. Learned counsel appearing for the Delhi Police submitted that during the course of inspection it was noticed that Frames and Slides had been imported into the country fitted with various additional and identifiable components of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comply with instructions that may be issued by the MHA. 19. Mr. Singh, learned CGSC appearing for the MHA had argued that since various components of a firearm are separately and independently recognized, it was impermissible for the petitioner to have imported Frames and Slides with other additional operational parts and components. According to Mr. Singh, the Explanations as appended to Forms VII and X-A clearly warranted the petitioner applying for permission for each component of a firearm which was ultimately imported. Mr. Singh also further vehemently urged that the petitioner before seeking to import parts of arms was clearly obliged by Rule 57(4) to apply to the MHA for grant of requisite permission and in having failed to do so the detention of the goods is clearly justified in law. 20. Having noticed the rival submissions that arise for consideration and before proceeding further, the Court deems it apposite to briefly notice the relevant provisions as made in the FTP as well as the Act and the 2016 Rules. 21. At the very outset, it may be noted that Chapter 9 of the FTP defines an accessory or an attachment in Para 9.01 to mean a part, sub assembly or assem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his consignment 3. Number of packages 4. ARMS Description Quantity 5. AMMUNITION Description Weight (In Kgs) or Number 6. Purpose for which required . In case of Import, place where articles ported imported stored or Deposited 8. Place of despatch and route 9. Place of destination 10. Name, description and address of the consignee 11. Period of validity of License ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 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 Rule 52 then prescribes that if the license be sought for manufacture of the aforementioned three categories and which may include any prohibited arms and ammunition, the Licensing Authority would have to obtain the prior permission of the Union Government before granting license in Form VII. The procedure for grant of a license under Form VII is then prescribed in Rule 54. 26. Rule 56 specifies the various obligations of licensees holding a license in Form VII. That provision reads thus: - 56. Obligations of licensees having licensee Form VII.-( 1) The validity of a licence granted in Form VII shall be subject to the manufacturer's compliance with the conditions contained in these rules and in the licence. (2) The licensee having a licence in Form VII shall mark all firearms and ammunition that it manufactures in the manner as specified in Rule 58. (3) The licensee company shall comply with the Foreign D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (5) thereof which obliges the licensee to maintain a record of all firearms, their parts and components and / or ammunition manufactured by it and as specified in Rule 65. 27. Rule 57 on which much stress had been laid by the respondents reads as under: - 57. Import of machinery for manufacturing arms and ammunition and other parts etc.─ (1) The licensee having a licence in Form VII shall submit an application along with the complete list of machinery to be installed, to be procured locally or imported. (2) The licence for acquisition, possession, import or transport of machinery shall be issued in Form I. (3) Import of arms specified in category II of Schedule I and raw material in the form of metal, alloy, fiber, polymers, wood and other allied items, for manufacturing of such arms, shall be allowed 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 ..... 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 Trade (Development and Regulation) Act, 1992 (22 of 1992). The persons bringing into India the arms and ammunition as a part of their personal baggage shall be governed by the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 and ammunition classified in that Chapter is restricted except for muzzle loaded firearms, shotgun barrels and swords, bayon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was amended twice thereafter in 2017 and 2020. The relevant part of Chapter 93 of HS as it stood in 2017 read as follows: - 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 35. The aforesaid Chapter was again amended in 2022 and the relevant extracts of that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was firstly noticed in the communication of the Delhi Police dated 21 June 2022 was with respect to the imported Slides and Frames being fitted with pre-installed operational parts. The objection essentially was that the operational parts which were found to be fitted to the Slides and Frames were liable to viewed as independent components of a firearm and for which a separate import permission was liable to be obtained. This submission was addressed in the backdrop of the definition of main firearm component set out in Rule 2(29) and the phrase parts and components as defined by Rule 2(37). The respondents also sought to draw sustenance from the Explanation appended to Form VII which, according to them, is an additional indicator of the petitioner being placed under an obligation to have made requisite declarations that additional parts and components of a firearm were also proposed to be imported. 38. In order to evaluate the correctness of the aforesaid objection, the Court deems it apposite to note that both Frames and Slides are included in the definition of main firearm component as well as in parts and components in Rule 2(29) and 2(37). The said Rules are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly notice or classify any other part or component of a firearm other than the four components which are also spelt out in Rule 2(29). The Court also bears in mind that Rule 2(37) uses the both the words mean and includes . Both those Rules are therefore liable to be interpreted and understood as being exhaustive. Although it is by now well settled that where a statutory provision uses both the words means and includes , irrespective of whether the two are separated by additional words while attempting to define a word or phrase is liable to be viewed as exhaustive, the Court recalls the succinct enunciation of this principle in P. P. Kasilingam v. P.S.G. College of Technology 1995 Supp (2) SCC 348 where their Lordships of the Supreme Court observed thus:- 19. We will first deal with the contention urged by Shri Rao based on the provisions of the Act and the Rules. It is no doubt true that in view of clause (3) of Section 1 the Act applies to all private colleges. The expression college is, however, not defined in the Act. The expression private college is defined in clause (8) of Section 2 which can, in the absence of any indication of a contrary intention, cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e private engineering colleges are controlled through the Board of Technical Education and Training and the Director of Technical Education in accordance with the directions issued by the AICTE from time to time. As noticed earlier the Grants-in-Aid Code contains provisions which, in many respects, cover the same field as is covered by the Act and the Rules. The Director of Technical Education has been entrusted with the functions of proper implementation of those provisions. There is nothing to show that the said arrangement was not working satisfactorily so as to be replaced by the system sought to be introduced by the Act and the Rules. Rule 2(d), on the other hand, gives an indication that there was no intention to disturb the existing arrangement regarding private engineering colleges because in that rule the expression Director is defined to mean the Director of Collegiate Education. The Director of Technical Education is not included in the said definition indicating that the institutions which are under the control of Directorate of College Education only are to be covered by the Act and the Rules and technical educational institutions in the State of Tamil Nadu which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural produce in the above definition is not restricted to any products of agriculture as specified in the Schedule but also includes such items which come into being in processed form and further includes such items which are called as gur, rab, shakkar, khandsari and jaggery. 82. This statement of the law, as can be seen from the quotation hereinabove, is without citation of any authority. In fact, in Jagir Singh v. State of Bihar [Jagir Singh v. State of Bihar, (1976) 2 SCC 942 : 1976 SCC (Tax) 204] , SCC paras 11 and 19 to 21 and Mahalakshmi Oil Mills v. State of A.P. [Mahalakshmi Oil Mills v. State of A.P., (1989) 1 SCC 164 : 1989 SCC (Tax) 56] , SCC paras 8 and 11 (which has been cited in P. Kasilingam [P. Kasilingam v. PSG College of Technology, 1995 Supp (2) SCC 348] ), this Court set out definition sections where the expression means was followed by some words, after which came the expression and includes followed by other words, just as in Krishi Utpadan Mandi Samiti case [Krishi Utpadan Mandi Samiti v. Shankar Industries, 1993 Supp (3) SCC 361 (2)]. In two other recent judgments, Bharat Coop. Bank (Mumbai) Ltd. v. Employees Union [Bharat Coop. Bank (Mumba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acter of those two provisions. The additional components which are chronicled in Form VII could at best be said to fall in the definition of the word manufacturing as set out in Rule 2(31) which significantly while defining components of a firearm uses the expressions e.g. and etc. . The submission of the respondents pivoting upon the Explanation to Form VII and on the basis whereof it was argued that since other components of a firearm are separately noted and classified alongside a Slide and Frame, it must consequently be held that the expression Frame or Slide would have to be understood to mean one which has no other pre-installed operational parts also lacks merit for the following reasons. 44. Firstly, the aforesaid submission must necessarily be considered and evaluated bearing in mind the fact that Form VII is the format on which a license for manufacture may come to be granted by the respondents. That Form is not meant for the purposes of import at all. In any case, the Court notes that the expressions manufacturer and manufacturing as set forth in Rules 2(30) and 2(31) clearly contemplate a person being engaged in the manufacture of either a complete firear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly noticed in Rule 2(31) and which pertains to the activity of manufacture of firearms, it would be unsound to import its provisions for the purposes of interpreting the phrase parts of firearms when sought to be imported. In any case, as this Court views Rules 2(29) and 2(37) read with the other relevant provisions of the Act and the 2016 Rules, it finds itself unable to countenance the submission that a Frame or a Slide must be understood to mean a component of a firearm which should not or cannot be pre-fitted with other parts thereof. 47. The correctness of the objection taken by the respondents may then be tested against the backdrop of the provisions made in the FTP, the ITC (HS) and the HS. It becomes relevant to note that the expression accessory or attachment has been defined in Clause 9.01 falling in Chapter 9 of the FTP to mean a part, sub-assembly or assembly that contributes to the efficiency of a piece of equipment without changing it basic functions. The phrase Parts and accessories of articles . in Heading 9305 of the ITC (HS) is liable to be interpreted in the aforesaid light. Viewed from this angle also the Court finds itself unable to countenance the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission that a Frame or a Slide of a firearm is normally or popularly understood to be components which are otherwise not fitted with a sub-part or a popularly identifiable component of a firearm. The Court has already found that neither the provisions contained in the FTP, the ITC (HS) nor the 2016 Rules ordain or can be interpreted to mean that a Frame or Slide should not contain an additional component or part of a firearm. The Court recalls the well- established principle of interpretation that where a doubt arises with respect to tariff entries, words and entries appearing therein are to be understood in the sense that the trade, public or consumer construes them. Entries in a tariff schedule, as per the aforesaid principle, which has now come to be popularly termed as the common parlance test bids us to interpret and understand entries as construed in their commercial or trade understanding. The aforesaid principles and the body of precedent which has evolved on the subject was elaborately noticed in CCE Vs. Connaught Plaza Restaurants (P) Ltd. ( 2012) 13 SCC 639 as under: - 20. Time and again, the principle of common parlance as the standard for interpreting te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be classified as coal under Schedule II Part III Entry I of the Madhya Pradesh General Sales Tax Act, 1958. Answering the question in the affirmative, it was observed as follows: (AIR pp. 1456-57, paras 4 6) 4. Now, there can be no dispute that while coal is technically understood as a mineral product, charcoal is manufactured by human agency from products like wood and other things. But it is now well settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense. *** 6. The result emerging from these decisions is that while construing the word coal in Schedule II Part III Entry I, the test that would be applied is what would be the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word. A sales tax statute is being one levying a tax on goods must in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as coal according to the meaning a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , para 12) 12. It is a well-settled principle of construction, as mentioned before, that where the word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention is clearly expressed by the legislature. But there is a word of caution that has to be borne in mind in this connection, the words must be understood in popular sense, that is to say, these must be confined to the words used in a particular statute and then if in respect of that particular items, as artificial definition is given in the sense that a special meaning is attached to particular words in the statute then the ordinary sense or dictionary meaning would not be applicable but the meaning of that type of goods dealt with by that type of goods in that type of market, should be searched. 33. Therefore, what flows from a reading of the aforementioned decisions is that in the absence of a statutory definition in precise terms; words, entries and items in taxing statutes must be construed in terms of their commercial or trade understanding, or accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a firearm, that clearly has no role to play in case of imports and stands confined to the activity of manufacture of firearms. 52. The submissions based on Forms VII and X would also not sustain the impugned action since the former again relates to the manufacture of firearms. The Court has already noticed that under the scheme of the Act and the 2016 Rules, it is permissible for a manufacturer to either produce a complete firearm or any part or component thereof. It is in the aforesaid light that relevant provisions have been incorporated in Form VII and thus call upon a prospective licensee to disclose whether it proposes to manufacture a complete firearm or merely a component thereof. The Court has also found that Form X does not embody an Explanation as found in Form VII. Additionally, all that Rule 88(2) refers to is parts of firearms. That Rule and the expression embodied therein would necessarily have to be interpreted and understood in light of the interpretation accorded to Rules 2(29) and 2(37) hereinabove. 53. Furthermore, neither the provisions made in the FTP nor those contained in the ITC (HS) or the HS lend support to the objection raised at the behest of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to notice that both Rules 2(29) and 2(37) are exhaustive and must be interpreted and understood accordingly. 56. The MHA then proceeds to record that the declarations which were made by the petitioner here while seeking permission to import Slides and Frames cannot be said to encompass the import of other licensable parts. The aforesaid opinion as expressed is also clearly rendered unsustainable since the petitioner did hold a license for manufacture of a complete firearm. Before this Court it was conceded on behalf of the respondents that if the manufacturer had been granted a license to manufacture a complete firearm it was not placed under any additional statutory obligation to obtain separate licenses for manufacturing parts or components of a firearm. In fact such an interpretation cannot also be sustained upon a reading of the various conditions which stand imposed and attached to the grant of a license to manufacture in terms of Form VII. The Form and the Explanation clarifies that it would apply to firearms and its various parts such as barrel, cylinder, bolt, breech block, slide, firing pin, frame or receiver, extractor and hammer/striker. The sub categorisation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se where the article proposed to be imported is one which is either not being manufactured or possible to be manufactured locally. The Court thus finds itself unable to conversely read or interpret Rule 57(4) as prohibiting the import of arms or parts thereof which can be manufactured locally, a view which was commended for acceptance by Mr. Endlaw, learned counsel for the Intervener only. 59. The acceptance of the interpretation to Rule 57(4) as advocated by Mr. Endlaw would not only run contrary to the scheme of the Act but also the FTP as would be clear from the reasons which are recorded hereinafter. Firstly, and when tested on the anvil of the Act and the 2016 Rules, the Court notes that Section 10 of the Act read with Rule 88 of the 2016 Rules only introduces a stipulation of a license being obtained for the purposes of import. Neither those provisions nor the various applications and forms connected with the subject of import, incorporate a prohibition against parts of arms which can be manufactured locally. The MHA while delegating its powers comprised in Section 10 of the Act to the DGFT also does not introduce any such prohibition. In fact, if Rule 57(4) were to be rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r being imported into the country or exported out. 9.41. Prohibited indicates the import/export policy of an item, as appearing in ITC (HS) or elsewhere, whose import or export is not permitted. 9.47. Restricted is a term indicating the import or export policy of an item, which can be imported into the country or exported outside, only after obtaining an Authorisation from the offices of DGFT. 62. As would be evident from the definition of the word restricted as extracted above, it is a term used to indicate that the import or export of an item is permitted subject only to an authorisation being obtained from the offices of the DGFT. The ITC(HS) and more particularly Heading 9305 in unequivocal terms prescribes that the import of parts or components of firearms falls in the restricted category. However, none of those provisions postulate a prohibition or restrict the import of parts of arms which can be or are being manufactured locally. The scope of the words prohibition , restriction and regulation was succinctly explained by the Supreme Court in Union of India Vs. Asian Food Industries (2006) 13 SCC 542 as follows: - 25. Would the terms rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or some such word, to bring out that effect. Viewed in the context of the relevant statutory provisions governing the import of parts of firearms, the 1992 Act, the FTP and the ITC(HS), this Court finds itself unable to hold that the restrictive regime relating to import of firearms comprehends a prohibition in respect of items which are being manufactured locally. 63. Before concluding, the Court also deems it necessary to dispose of two minor issues which came to be raised. The respondents had urged that the requirement of obtaining a license under Form X is a stipulation which continues to apply notwithstanding the import permission granted by the DGFT. This submission was made in light of the contention addressed on behalf of the petitioner that once the power to issue an import permission stood delegated to the DGFT, there is no legal obligation on an importer to apply for and obtain a license under Form X. The Court notes that Section 10 of the Act specifically deals with the power to issue licenses in connection with import of arms and parts thereof. It is that power which stands delegated and transferred to the DGFT. The DGFT has thus for all practical purposes step ..... X X X X Extracts X X X X X X X X Extracts X X X X
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