Safeguard Duty of 20% on Wide HR Coils Confirmed

·     Three Year Duration with Sliding Scale going Down from 20% (Year 1) to 10% (Year 3)

·     Global Coverage, All Sources, Specially China and Ukraine in Net

·     Turkey (from 5 Feb 2016) and other Developing Countries Excluded

·     Advance Licence and SEZ Imports Exempted for Export Production

·     Goods Imported above MIP (See WIndex 46, DIndex 6546 and BIG’s Customs Tariff Ch. 72) Exempted

Click here for Final Findings dated 15.03.2016

DG Safeguard Main Finding of Injury in 15 March 2016 Final Order

In the given circumstances, an attempt was made to analyse the trend in the period after the POI i.e. upto 2nd quarter of 2015-16 to draw a clear inference about the possibility of accentuation of the injury to the domestic industry. The domestic industry vide their post Public Hearing submissions submitted the domestic data pertaining to certain economic parameters for the subject “product under consideration” imported into India. The data analysis is as under:

 

2013-14

2014-15

2015-16 (Annualised on the basis of Q1)

2015-16 (Annualised on the basis of Q1+Q2)

Total Imports (MT)

1252441

2644911

3524932

4587168

Production (MT)

17881187

17836937

17827180

16796006

Domestic Sales (MT)

10342565

9949214

10359716

10504640

Total Demand (MT)

22864053

25528003

28157248

30268388

Market Share of Import (%)

5

10

13

15

Market Share of DI(%)

45

39

37

35

Inventory(MT)

636879

648290

657099

871440

Profit/ (Loss) (Indexed)

100

136

(114)

(120)

On scrutiny of the above data it is observed that during the post POI i.e 2015-16(Q1+Q2)(Annualised), between the period Q1 to Q2, there is a increase in the imports by about 30%. The market share of imports have increased by about 2% as against the corresponding decline of the market share of the domestic industry by about 2%. Further, there is a decline of about 6% in production whereas domestic sales increased only by approximately 1% during the post POI. This shows that the industry parameters deteriorated sharply between Q1 and Q2 of 2015-16.

Conclusion:

i.   There has been a significant increase in imports of the PUC in absolute terms as well as in relation to domestic production over the entire POI. This surge in imports is also quite significant in relation to total demand as well.

ii.  The investigation has indicated that the domestic industry has suffered serious injury, considering overall performance, on the basis of listed economic parameters such as market share, and profitability, which have sharply declined from the base year till 2015-16(Annualised) whereas market share of imports have increased during the same period. This has caused significant overall impairment to the domestic industry. This establishes causal link between the rise in imports and serious injury caused to the domestic industry during the POI.

iii.  The domestic industry has been able to demonstrate that the developments in the market for surge in imports of the PUC were unforeseen.

iv.  There will be a negative impact on the downstream industry as a result of safeguard duty on the PUC which is a raw-material for them.

v.  It is also established that imposition of safeguard duty in this case would be in public interest because it will aid in recovery of the domestic industry and ensure that end users get a stable supply of subject goods from the domestic industry.

vi.  From the analysis of post POI data, it has been observed that the position of domestic industry further deteriorated on account of production, sales & market share. Thus, I conclude that serious injury/ threat of serious injury exists and further protection to the domestic industry is required to be extended.

[Customs Notification No. 01 (SG) dated 29th March 2016]

Whereas, in the matter of import of "Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more” (hereinafter referred to as the subject goods), falling under heading 7208 or tariff item 7225 30 90 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act), the Director General (Safeguard), in his preliminary findings, published vide number G.S.R. 690 (E), dated the 9th September, 2015, in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), dated the 9th September, 2015, had come to the conclusion that increased imports of subject goods into India has caused and threatened to cause serious injury to the domestic industry and producers of subject goods, thereby necessitating the imposition of provisional safeguard duty on imports of the subject goods into India;

And whereas, on the basis of the aforesaid findings of the Director General (Safeguard), the Central Government has imposed provisional safeguard duty on import of the subject goods into India for a period of two hundred days with effect from the 14th day of September, 2015 vide notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 2/2015-Customs (SG), dated the 14th September, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number GSR 694 (E), dated the 14th September, 2015;

And whereas, in the final findings vide number G.S.R. 308(E), dated the 15th March, 2016, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), the Director General (Safeguard) has recommended the imposition of safeguard duty on subject goods falling under heading 7208 or tariff item 7225 30 90 of the First Schedule to the Customs Tariff Act for a period of two years and six months from the date of levy of provisional safeguard duty;

Now, Therefore, in exercise of the powers conferred by sub-section (1) of section 8B of the Customs Tariff Act, read with rules 12, 14 and 17 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 2/2015-Customs(SG), dated the14th September, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number GSR 694 (E), dated the 14th September, 2015, the Central Government, after considering the said findings of the Director General (Safeguards) and subject to the provisions of paragraph 2, hereby imposes on subject goods falling under heading 7208 or tariff item 7225 30 90 of the First Schedule to the Customs Tariff Act, when imported into India, a safeguard duty at the following rate, namely:-

(a) twenty per cent ad valorem minus anti-dumping duty payable, if any, when imported during the period from 14th September, 2015 to 13th September, 2016 (both days inclusive);

(b) eighteen per cent ad valorem minus anti-dumping duty payable, if any, when imported during the period from 14th September, 2016 to 13th March, 2017 (both days inclusive);

(c) fifteen per cent ad valorem minus anti-dumping duty payable, if any, when imported during the period from 14th March, 2017 to 13th September, 2017 (both days inclusive); and

(d) ten per cent ad valorem minus anti-dumping duty payable, if any, when imported during the period from 14th September, 2017 to 13th March, 2018 (both days inclusive).

2.  The safeguard duty shall not be imposed on the subject goods which are imported at or above the Minimum Import Price in terms of the notification of the Government of India in the Ministry of Commerce and Industry (Department of Commerce) (Directorate General of Foreign Trade) No. 38/2015-2020, dated the 5th February, 2016 published in the Gazette of India (Extraordinary), Part II, Section 3, Sub-section (ii) vide S.O. 391(E) dated the 5th February, 2016.

3.  Nothing contained in this notification shall apply to imports of subject goods from countries notified as developing countries under clause (a) of sub-section (6) of section 8B of the Customs Tariff Act, other than People’s Republic of China and Ukraine.

Explanation: The following are not included in the scope of subject goods:

a)  Hot-rolled flat products of steel with nominal width less than 600mm;

b)  API grade steel;

c)  Silicon electrical steel;

d)  Hot-rolled flat products of steel of spring steel quality;

e)  Hot-rolled flat products of steel which are electrolytically plated or coated with zinc;

f)   Hot-rolled flat products of steel otherwise plated or coated with zinc; and

g)  Hot-rolled flat products of stainless steel.

[F.No.354/219/2015-TRU]