Dual licensing for restricted arms imports requires defence permission plus Form X compliance under the Arms Rules.

Import of restricted arms items is described as subject to two overlapping regimes: permission from the delegated defence authority under the foreign trade framework and a separate Form X licence under the Arms Rules from DGFT. The text states that a later circular clarified that both approvals were required and that Form X applications were to be submitted to DGFT. It also notes that, where regulatory ambiguity delayed processing and consignments had already arrived for defence-related indigenisation, the authorities were directed to process the Form X applications expeditiously and permit clearance of the arrived consignments after compliance steps were taken.

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Issues: (i) Whether the importer, having obtained import licences from the delegated defence authority, was also required to obtain a separate licence in Form X from the DGFT before the imported arms and ammunition or their parts could be cleared or future imports permitted; (ii) Whether the already imported consignments and the remaining consignments were to be released or processed in the facts of the case, keeping in view the confusion in the existing regime and the subsequent clarification issued by the authorities.

Issue (i): Whether the importer, having obtained import licences from the delegated defence authority, was also required to obtain a separate licence in Form X from the DGFT before the imported arms and ammunition or their parts could be cleared or future imports permitted?

Analysis: The import of restricted arms items was found to operate under two overlapping regimes. The defence authority had issued the import licences under the delegated foreign trade framework, but the Arms Rules required a separate Form X licence for import of arms and ammunition and related parts. The Court noted that the SOP then in force did not clearly explain the Form X mechanism, and the authorities themselves had acknowledged the absence of a clear online or procedural route. The later circular of 8 February 2023 clarified that both permissions were required and that applications for Form X were to be submitted to DGFT.

Conclusion: A separate Form X licence from DGFT was required in addition to the import permission already obtained from the defence authority.

Issue (ii): Whether the already imported consignments and the remaining consignments were to be released or processed in the facts of the case, keeping in view the confusion in the existing regime and the subsequent clarification issued by the authorities?

Analysis: The Court found that the importer had already acted under the licences granted for demonstration and indigenisation, that two consignments had already arrived, and that the delay was substantially attributable to regulatory confusion between the authorities. Since the goods were intended for defence-related indigenisation and not for immediate commercial sale, the holding of the consignments on procedural grounds was considered unwarranted. The Court therefore directed the importer to apply for Form X, required the DGFT to process the applications within stipulated time, and permitted clearance of the two arrived consignments for movement to the importer's factory, while the remaining applications were to be decided expeditiously.

Conclusion: The two existing consignments were permitted to be cleared after Form X processing, and the remaining applications were directed to be processed by DGFT within the prescribed time.

Final Conclusion: The writ petition was disposed of with directions that balanced regulatory compliance under the Arms Rules and Customs framework with relief to the importer in view of the admitted confusion in the licensing regime.

Ratio Decidendi: Where import of restricted arms items is governed by overlapping statutory regimes, clearance and further import can be regulated by requiring compliance with both the import permission under the delegated trade framework and the separate licence mandated by the Arms Rules, but procedural ambiguity caused by the authorities cannot be visited on the importer so as to defeat already granted licences and defence-related imports.

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