Allowed

Syndicate Innovation International Limited v. the Office of the Commissioner of Customs & Anr.

Delhi HC13 Dec 2024W.P.(C)/16293/2022

Case brief

AI extract

What is this about?

The Delhi High Court directed the release of firearm parts consignments withheld by Customs, following Supreme Court rulings supporting the importer's license. The court revoked prior conditions and denied demurrage claims as the licensing authority had not caused the inspection delay.

What did the court decide?

Directing respondents to release consignments; revoking conditions and cancelling superdarinama; rejecting prayer for demurrage compensation.

Syndicate Innovation International Limited Vs the Office… — Company and Corporate | Delhi HC (2024)

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$~12

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- W.P.(C) 16293/2022, CM APPL. 56158/2024 & CM APPL. 67130/2024

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SYNDICATE INNOVATION INTERNATIONAL LIMITED

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.....Petitioner Through: Mr. Joy Basu, Senior Advocate with Mr. Kanak Bose, Mr. Anoop George, Advocates

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versus

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THE OFFICE OF THE COMMISSIONER OF CUSTOMS & ANR. .....Respondents Through: Mr. Amit Tiwari, CGSC for R-3 Mr. Anurag Ojha, SSC with Mr. Dipak Raj, Mr. Subham Kumar, Advocates for R-1

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CORAM:

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HON'BLE MR. JUSTICE SANJEEV NARULA

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O R D E R % 13.12.2024

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Through the present writ petition, the Petitioner, a licensed Arms manufacturer under the Arms Rules, 2016, seeks appropriate directions against the Respondents’ refusal to the release of five consignments ( specified in paragraph 4 (xi) of the writ petition ), comprising parts of firearms, specifically ‘Slides’ for handguns. These consignments were imported by the Petitioner from Turkey, under an Import License dated 23^rd October, 2020, issued by the Directorate General of Foreign Trade¹ , Ministry of Commerce and Industry, intended for further manufacture of handguns by the Petitioner.

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1 “DGFT”

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W.P.(C) 16293/2022 Page 1 of 5

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 17/12/2024 at 11:45:15

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According to the Petitioner, the consignments in question, which arrived at the IGI Airport in September 2022, have been withheld by the Respondents for over two years pending clearance under the Arms Rules, 2016. The Petitioner contends that this protracted delay is unwarranted and has inflicted substantial financial losses, given the consignments’ cumulative value of INR 5,80,08,805/-. The Petitioner thus calls upon this Court to expedite the release of the consignments languishing at the airport.

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Presenting the Petitioner’s case, Mr. Joy Basu, Senior Counsel, makes the following submissions:

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3.1 The Petitioner, duly recognized as a “manufacturer” under the Arms Rules, 2016, holds a valid license (License No. M/New/007/MHA/2018 dated 12^th March, 2018) issued by the Ministry of Home Affairs² for manufacturing complete firearms. The contested consignments consist of ‘slides,’ an essential component of firearms/handguns. The Petitioner also possesses a valid import license issued by the DGFT authorizing the importation of these slides.

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3.2 Despite the Petitioner’s compliance with licensing requirements, the authorities at IGI Airport refused to release the consignments, on the basis of an oral objection by Respondent No. 1 (Office of the Commissioner of Customs). They insisted that, as these consignments allegedly constituted ‘firearms,’ a no-objection certificate (NOC) from the Delhi Police was required. Although the Delhi Police subsequently issued an NOC, the consignments remained withheld.

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3.3 On 23^rd July, 2024, counsel for Respondent No. 1 stated that the

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2 “MHA”

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W.P.(C) 16293/2022 Page 2 of 5

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consignment was being seized on account of Office Memorandum³ dated 03^rd August, 2022, issued by MHA. Consequently, MHA was impleaded as Respondent No. 3.

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3.4 More than two years have lapsed since the consignments have reached India, however, without any seizure notice or confiscation, Respondent No. 1 - Customs Department has, in an arbitrary manner, continued to withhold the release of the same by placing reliance on the OM issued by MHA.

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3.5 The counter affidavit filed by Respondent No. 3 (MHA) narrows its objection to the contention that the Petitioner’s license covers only the import of discrete ‘slides’ and ‘frames,’ not pre-fitted or embedded components of such parts. This very objection has been considered and rejected by the Coordinate Bench of this Court in judgment dated 07^th October, 2022 in W.P.(C) 10143/2022. Even though both the MHA as well as DGFT preferred appeals against the aforementioned judgment, the same were rejected by way of a reasoned decision dated 29^th August, 2024 passed by the Division Bench in LPA No. 695/2022.

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3.6 Thereafter, MHA preferred an SLP against the judgment of the Division Bench before the Supreme Court; however, the said challenge was also rejected. Thus, the Petitioners have been successful in three rounds of litigation regarding the issues urged in the present writ petition.

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3.7 Hence, the matter stands conclusively resolved in favour of the Petitioner. Therefore, given that identical objections of the Respondents have been previously overruled, the Petitioner urges the Court to direct the Respondents to release the consignments without further delay.

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Mr. Amit Tiwari, Central Government Standing Counsel for

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3 “OM”

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W.P.(C) 16293/2022 Page 3 of 5

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Respondent No. 3 - Ministry of Home Affairs, very fairly acknowledges that Respondent’s challenge to the decision of the Division Bench of this Court dated 29^th August, 2024 passed in LPA No. 695/2022, before the Supreme Court has been unsuccessful. In this regard, he places reliance on order dated 06^th December, 2024 passed by the Supreme Court in SLP No. 29390/2024, which reads as follows:

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“1. Delay condoned.

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2. Having heard the learned counsel appearing for the parties and having gone through the materials on record, we see no reason to interfere with the impugned order passed by the High Court.

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3. However, the Question of law, if any, is kept open.

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4. The Special Leave Petition is, accordingly, dismissed.

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5. Pending application(s), if any, stand disposed of”

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The Court has considered the submissions of the parties. It is noted that even though Supreme Court’s order dated 06^th December, 2024, keeps certain question of law open for consideration, the factual scenario and the objections raised by the Respondent have been duly considered and determined by the Division Bench in LPA No. 695/2022. Therefore, in the opinion of the Court, the Petitioner is entitled to relief sought in the present writ petition.

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The relief sought in prayer (a), regarding the release of consignments stands granted through order dated 30^th September, 2024, with certain conditions. However, since the Petitioner is entitled to succeed, the superdarinama is cancelled and the conditions imposed by the Court stand revoked. The Petitioner shall be entitled to deal with the said goods under the consignments, in accordance with law.

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As regards the prayer (b), the Court adopts the reasoning of the Coordinate Bench of this Court in judgment dated 07^th October, 2022 passed in

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W.P.(C) 16293/2022 Page 4 of 5

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W.P.(C) 10143/2022 (paragraph 64) and accordingly rejects the said prayer for award of compensation for demurrage. For reference, the said paragraph is reproduced hereinbelow as follows:

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“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.”

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[Emphasis added]

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With the above directions, the present writ petition is disposed of along with pending applications.

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Before parting, it is noted that in the previous order dated 09^th December, 2024, the next date of hearing was inadvertently recorded as 13^th December, 2025. Accordingly, the same shall be read as 13^th December, 2024.

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SANJEEV NARULA, J

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DECEMBER 13, 2024/ab

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W.P.(C) 16293/2022 Page 5 of 5

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Syndicate Innovation International Limited v. the Office of the Commissioner of Customs & Anr.

Case brief

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Syndicate Innovation International Limited v. the Office of the Commissioner of Customs & Anr.

Case brief

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