(1)The license for manufacture or proof-test or both shall be granted by the licensing authority to an applicant who fulfills the eligibility criteria laid down in these rules provided that no adverse remarks are received from various government agencies entrusted for verifying the antecedents of the applicant company or its directors or responsible person, as the case may be.(2)[ A licence granted in Form VII shall be valid for the life time of the licensee company:Provided that the licensee shall be required to setup the facility for manufacture or proof test of arms and/or ammunition, recruit technical and administrative staff, develop and proof test proto-types of arms and ammunition, conduct trial runs and any other activity related to the setting up of the facility for the manufacture or proof-test of arms and ammunition, within a period of seven years from the date of grant of a licence:Provided further that the licensing authority may extend the period of seven years by a further period of three years, on the basis of a written representation received from the licensee and after recording reasons for granting such an extension:Provided also that if during the period of seven years or the extended period of three years, as the case may be, the licensee fails to setup the manufacturing or proof-test facility or is unable to take other operating steps required for starting commercial production, the licence shall be suspended or revoked.;] [Substituted by Notification No. G.S.R. 1342(E), dated 27.10.2017 (w.e.f. 15.7.2016).](3)(a)No manufacturing facility shall be set-up in the border areas, restricted areas or prohibited areas and any area declared as 'disturbed area' by the Central Government.(b)The manufacturer applicant may setup the facilities in Special Economic Zones (SEZ), Industrial Parks and other industrial areas in addition to any other location duly approved by the State Government concerned for this purpose.(4)The licensee shall make an application on its letter head for commencement of commercial production accompanied by -(i)a declaration to the effect that the licensee has installed the plant and machinery, successfully carried out the trial run and is ready for commencement of commercial production of the items licensed for manufacture or proof-test;(ii)a declaration to the effect that the licensee has installed and applied the requisite quality control system for manufacture or proof test of firearms or ammunition;(iii)a list of particulars of the key technical personnel employed by the licensee for carrying out manufacture or proof-test facility along with the proof of their professional expertise and training undergone and identification documents as specified for directors in rule 53;(iv)a declaration to the effect that the licensee has fully complied with the security guidelines as contained in the Security Manual prepared by the Ministry of Defense, Department of Defense Production, for licensed defense industries.(5)The licensing authority shall get conducted a security and appraisal audit to ensure that the applicant licensee has complied with the declaration specified in clause (iv) of sub-rule (4).
