Safeguard Duty Rules Curtailed
·
Duty Concessions under Indo-Japan FTA Notified
·
Increase in Imports Injurious to Domestic Industry
Condition to Trigger Measures
· Progressive
Reduction in Duty if Duration >1 year
[Ref: Notification - No. 7/2017 - Customs (N.
T.) dated 24 January 2017]
1. Short title
and commencement
2. Definitions
3. Duties of Director General
4. Initiation of investigation
5. Principles
governing
investigation
6. Confidential
information
7. Determination of serious injury or threat of serious injury
8. Preliminary
findings
9. Application of provisional
bilateral safeguard measure
10. Final findings
11. Application of bilateral safeguard measure
12. Date of commencement of bilateral
safeguard measure
13. Refund of duty
14. Duration
15. Liberalisation of bilateral safeguard measure
16. Review
In exercise of the powers conferred by sub-section (1) of section 5 of the Customs Tariff Act, 1975 (51 of 1975), read with sub-section (1)
of section 25 and section 156 of the Customs Act, 1962 (52 of 1962), the Central Government hereby makes the following
rules, namely:-
1. Short
title and commencement
(1) These rules may be called the India-Japan
Comprehensive Economic Partnership Agreement (Bilateral
Safeguard Measures) Rules, 2017.
(2) They shall come
into force on the date of their
publication
in the Official Gazette.
2. Definitions
(1) In
these
rules, unless the context
otherwise requires,-
(a) “critical circumstances” means circumstances in which there is clear evidence that increased imports of an originating
good
have caused or are threatening
to cause serious
injury
to the domestic industry and where
delay in imposition
of provisional bilateral safeguard measure would cause damage to the
domestic industry which would be difficult
to repair;
(b) “Director
General”
means the Director General
(Safeguard)
appointed by the Central Government under sub-rule (1) of rule 3 of the Customs Tariff (Identification and Assessment of Safeguard Duty)
Rules, 1997;
(c) “domestic industry” means
the producers,-
(i) as a whole of the like or directly competitive good
in India;
or
(ii) whose collective output of the like good or a directly competitive good in India constitutes a
major proportion of the total
production
of the said good in India;
(d) “ good” means any merchandise,
product, article or material;
(e) “increased imports” means increase in imports from Japan whether in
absolute terms or relative to domestic production;
(f) “interested party” includes,
-
(i) any exporter or producer from Japan or importer of the good subjected to investigation for purposes of taking bilateral safeguard measure or a trade or business association, majority
of the members of which are producers, exporters
or importers of such a good,
(ii) the Government
of Japan; and
(iii) a producer of the like good or directly competitive good in India or a trade
or business association, a majority of members of which produce or trade the like good or directly competitive good
in India;
(g) “originating good” means a good which qualifies as an originating good under the
provisions of the Customs Tariff (Determination of Origin of Goods
under the Comprehensive Economic Partnership Agreement between the
Republic of India
and
Japan) Rules, 2011 notified vide notification of the Government of India,
Ministry of Finance, Department of Revenue, No. 55/2011
– Customs (N.T.),
dated the 1st August, 2011, published vide number G.S.R. 594 (E), dated the 1st
August, 2011;
(h) “serious injury” means a significant overall impairment in the position of the domestic industry;
(i) “threat of serious
injury” means serious injury that, on the basis of facts and not
merely on allegation,
conjecture or remote possibility,
is clearly imminent;
(j) “Trade Agreement” means the „Comprehensive Economic Partnership Agreement between the Republic of India and Japan‟.
(2) Words and expressions used herein and not defined, but defined in the Customs Tariff Act, 1975 (51 of 1975) and the Customs Act, 1962
(52 of 1962) shall have the meanings respectively assigned
to them in those Acts.
3. Duties of Director General
Subject to the provisions of these rules, it shall be the duty of the
Director General, -
(a) to investigate whether increased imports of an originating good into India, have caused or are threatening to cause serious injury to the domestic industry as a result of elimination
or reduction of a customs
duty under the Trade
Agreement;
(b) to evaluate
all relevant factors of an objective and quantifiable nature having a bearing on the situation of the domestic industry, in
particular, the rate and amount of the increase in imports of originating good in absolute and relative terms, the share of the domestic market taken by the increased imports of the originating
good, changes in the level of sales, production, productivity, capacity
utilisation, profits and losses
and employment;
(c) to submit his findings, provisional or otherwise, to the Central Government as to
the serious injury or threat of serious injury to the domestic
industry caused by
increased imports of an originating good from Japan as a result of elimination or
reduction of a customs duty under
the Trade Agreement;
(d) to recommend bilateral safeguard measure which if adopted would be adequate to prevent or remedy the serious
injury;
(e) to recommend the
duration of the bilateral safeguard measure and
where the period so recommended is more
than a year,
to recommend progressive liberalisation
necessary to facilitate
adjustment;
(f) to review the
need
for continuation
of a bilateral safeguard
measure.
4. Initiation of investigation
(1) Except
as provided in sub-rule (4),
the Director General shall, on receipt of a written application by
or on behalf of the domestic
producer of like
good
or directly competitive good, initiate an investigation to determine the existence of serious injury or threat of serious injury to the domestic industry, caused by increased imports of an originating good as a result of the elimination or reduction of customs duty under the Trade
Agreement.
(2) An application under sub-rule (1) shall be made in the form as may be specified by the Director General
in this behalf and such application
shall be supported by,-
(a) evidence of
-
(i) increased
imports of the originating
good;
(ii) serious injury or
threat of serious injury to the domestic industry;
(iii) a causal link between imports
of the originating good and the alleged serious
injury or
threat of serious injury; and
(iv) the reduction or elimination of a customs duty under the Trade Agreement being a cause which contributes significantly
to the increase in imports of
the originating good and such increase in imports constitutes
a substantial cause
of serious injury to
domestic industry:
Provided that the cause of
reduction or
elimination of
a customs duty under the Trade Agreement need not be equal to or greater than any
other cause; and
(b) a statement on the efforts being made, or planned to be made, or both, to make an adjustment
to import
competition.
(3) The Director General shall not initiate an investigation pursuant to an application made under sub-rule (1) unless he examines the accuracy
and
adequacy
of the evidence provided in the
application and
satisfies himself that
there is sufficient evidence regarding-
(a) increased imports of the originating good;
(b) serious injury or threat of serious
injury;
(c) a causal link between imports of the originating good and the alleged serious
injury or threat of serious
injury; and
(d) the reduction
or elimination
of a customs duty under the Trade
Agreement,
contributing significantly to the increase in imports of the originating good and
such increase in imports constitutes a substantial cause of serious injury or threat
thereof to domestic industry:
Provided that the cause of reduction or
elimination of a customs duty under the Trade Agreement need not be equal to
or greater than any other cause.
(4) Notwithstanding anything contained in sub-rule (1), the Director General may
initiate an investigation suo moto if he is satisfied with the information received from any Commissioner of
Customs appointed under the Customs Act, 1962 (52 of 1962) or any other source that sufficient evidence exists as referred
to in clause (a), clause (b),
clause (c) and
clause (d) of sub-rule (3).
5. Principles
governing
investigation
(1) Once the decision is taken by the Director
General to initiate investigation to determine the serious injury
or threat of serious injury
to domestic industry, consequent upon the increased imports of
an
originating good into India as a result of the elimination or reduction of a customs duty
under the Trade Agreement, the Director
General shall issue a public notice on initiation of investigation and the
public
notice
shall, inter alia, contain adequate
information
on the following, namely:-
(a) a precise description
of the originating
good
subject to the investigation
and
its classification under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975);
(b) the period subject to
the
investigation;
(c) the date of
initiation of the
investigation;
(d) a summary statement of the facts on which the allegation of serious
injury or threat
of serious injury is based;
(e) reason for initiation
of the investigation;
(f) the address
to which representations
by
interested parties should be directed; and
(g) the time-limits allowed to interested parties for providing their views through appropriate representation.
(2) The Director General shall forward
a copy of the public notice to -
(a) the Central Government in the Ministry of Commerce and Industry and other Ministries concerned, as he deems fit;
(b) the concerned trade associations or known exporters of the originating good, the
increased imports of which have been alleged to cause or threaten to cause serious injury to
the
domestic industry;
(c) the Government
of Japan;
and
(d) other interested parties, as
he deems fit.
(3) The Director General shall also provide a copy of the application referred to in sub-rule
(1) of rule 4 to -
(a) the Central Government
in the Ministry of Commerce and Industry;
(b) the known exporters of the originating good, or the concerned trade associations;
and
(c) the Government
of Japan:
Provided that the Director General shall also make available a copy of the
application, upon request in
writing, to any other
interested party.
(4) The Director General may
issue a notice, calling for any
information in such form as may
be specified by him from the exporters, foreign producers and Government of Japan and such information shall be furnished by
them and the Government of Japan in writing to the Director
General within thirty days from the date of receipt of the notice or within such extended period as
the Director General may allow
on sufficient cause being shown.
Explanation.- For the
purpose of this rule, the public
notice and other
documents shall be deemed to have been received one week after the date on which these documents were sent by the
Director General by registered post or transmitted to the appropriate diplomatic representative
of the Government of Japan.
(5) The Director General may also
provide opportunity
to the industrial users
of the originating good under
investigation and to representative
consumer organisations in cases where the originating good is commonly
sold at retail level to furnish information which is relevant to
the investigation.
(6) The Director General may allow an interested party or its representative
to present the
information relevant to investigation orally but such oral information shall be taken into
consideration by the Director General only when it is subsequently submitted in writing, within the time frame
specified by the
Director General.
(7) The Director General shall make available the evidence presented to him by one interested
party to the other interested
parties, participating in the investigation.
(8) In case where an interested party refuses access to or otherwise does not provide necessary
information within the period specified by
the Director General or significantly impedes the
investigation, the Director General may record his findings on the basis of the facts available to him and make such recommendations to the Central Government as he deems fit under such circumstances.
6. Confidential information
(1) Notwithstanding anything
contained in sub-rules (1),
(3) and (7) of rule 5, sub-rule (2) of rule 8 and sub-rule (5) of rule 10, any information
which is by nature confidential or which is provided on a confidential basis shall, upon cause being
shown, be treated as such by the Director General and shall not be disclosed without specific authorisation of the party providing such information.
(2) The Director General may require the parties providing information on confidential
basis to furnish non-confidential summary thereof and if, in the opinion of the party providing such
information, the same cannot be summarised, such party may submit to the Director General a statement
of reasons why summarisation is
not possible.
(3) Notwithstanding anything contained in sub-rule (2), if the Director General is satisfied
that the request for confidentiality is not warranted or the supplier of the information is unwilling either to make the information public or to authorise its disclosure in a generalised
or summary form, he may disregard such information unless it is demonstrated to his satisfaction from appropriate
sources that such information
is correct.
7. Determination of serious injury or threat of serious injury
The Director General shall
determine serious injury or threat of serious injury to the domestic industry taking into account,
inter alia,
the following principles,
namely:-
(a) the Director General shall evaluate all relevant factors of an objective
and quantifiable nature having a bearing
on the situation of the domestic
industry, in particular, the
rate and amount of the
increase in imports of the originating
good
in absolute and relative terms, the share of the domestic market taken by increased
imports of the originating good, changes in the level of sales, production,
productivity,
capacity utilisation,
profits and losses
and employment; and
(b) the determination referred under
this rule, shall not be made unless the investigation demonstrates, on the
basis of objective
evidence, the existence
of the causal link between increased
imports of the originating good and
serious injury or
threat thereof and when factors other than increased imports of the originating
good
are causing injury to the domestic industry at the same time, such injury
shall not be attributed
to the increased
imports of the originating
good.
8. Preliminary findings
(1) The Director General shall proceed expeditiously with the conduct of the investigation and in critical circumstances, may record a preliminary finding
regarding serious
injury
or threat of serious injury to the domestic industry as
a result of increased imports
of an originating good.
(2) The Director General shall issue a public notice regarding such preliminary findings and send
a copy of the public notice to -
(a) the Central Government, in the Ministry of Commerce and Industry and in the
Ministry of Finance;
(b) the Government of Japan.
9. Application of provisional bilateral
safeguard measure
(1) The Central
Government, on the basis of the
preliminary findings of the
Director General, may -
(a) suspend further reduction of any rate of customs duty on the originating good
provided for under the Trade Agreement;
or
(b) increase
the rate of customs duty on the originating good to a level not to exceed the lesser of:
(i) the Most Favoured
Nation applied rate of customs duty on the originating
good in effect
on the day when
the bilateral safeguard measure is
taken;
or
(ii) the Most Favoured Nation applied rate of customs duty on the originating
good
in effect on the day immediately preceding the date of entry into force of
the Trade Agreement.
(2) The bilateral safeguard measure under sub-rule (1) shall remain in force only for a period
not exceeding two hundred days from
the
date on which it was imposed.
10. Final
findings
(1) The Director General shall, within eight months from the date of
initiation of the investigation, or within an extended period not exceeding
one year from the date
of initiation
of the investigation,
as the Central Government
may allow, determine
whether,-
(a) the increased imports
of the originating good under
investigation has
caused or threatened to cause serious
injury to the domestic
industry; and
(b) a causal
link exists between the increased imports of the originating good due to
the elimination or reduction of a customs duty
under the Trade Agreement and serious
injury or
threat of serious injury.
(2) The Director General shall also give his recommendation regarding bilateral safeguard
measure which would be adequate to prevent or remedy
the serious injury
and
to facilitate
adjustment.
(3) The Director General shall also make his recommendations regarding the duration of the bilateral
safeguard measure:
Provided that where
the period recommended is more than one year, the Director General shall
also recommend progressive liberalisation of the bilateral safeguard measure
at
regular intervals during
the period of application as necessary to facilitate
adjustment.
(4) The final findings, if affirmative, shall contain all information on the matter of facts and law
and reasons which have led to the conclusion.
(5) The Director
General
shall
issue a public notice recording his final findings.
(6) The Director General shall send a copy
of the public notice regarding his final findings to-
(a) the Central Government, in the Ministry of Commerce and Industry and in the
Ministry of Finance;
(b) the Government
of Japan.
11. Application of bilateral
safeguard measure
(1) On receipt of the recommendation of
the Director General, in order to prevent or remedy the serious injury and to facilitate adjustment
in respect of the originating good covered under the final findings, the
Central Government may suitably amend the notification, issued under sub-section (1) of section 25 of the Customs Act,
1962 (52 of 1962) to give effect
to the provisions of the Trade Agreement, so as to
-
(a) suspend further reduction of any rate of customs duty on the originating good
provided for under
the Trade Agreement; or
(b) increase
the rate of customs duty on the originating good to a level not to exceed
the lesser of:
(i) the Most Favoured Nation applied rate of customs duty on the originating good
in effect
on the day when
the bilateral safeguard measure is
taken;
or
(ii) the Most Favoured
Nation applied rate of customs duty on the originating good in effect on the day immediately preceding the date of entry into
force of the Trade Agreement.
(2) In case, the final findings of the Director General is contrary to the prima facie evidence on the
basis of which the investigation was initiated and the final findings do not have
recommendation for applying
bilateral safeguard measure, the Central Government shall within
thirty days of the publication of final findings by the Director General under rule 10, withdraw the provisional
bilateral safeguard
measure imposed,
if any.
(3) Upon termination of a bilateral safeguard measure, whether provisional or final, the rate
of customs duty for an originating good subject to the measure shall
be the rate which would have been in effect
but for the bilateral safeguard measure.
12. Date of commencement of bilateral safeguard measure
(1) The bilateral
safeguard measure applied under rule 9 and rule 11 shall take effect from the date of publication
of the notification, in the Official
Gazette,
imposing such bilateral
safeguard measure.
(2) Notwithstanding
anything
contained in sub-rule (1),
where a provisional bilateral safeguard measure has been imposed and where the
Director General has recorded a finding that increased imports have caused or threaten to cause serious injury to domestic industry, it shall be
specified in the notification issued under rule 11 that such
bilateral safeguard
measure shall take
effect
from the date
of imposition of the provisional bilateral
safeguard measure.
13. Refund of duty
If the bilateral safeguard measure taken after the conclusion of the
investigation results in a rate of duty which is lower than the rate of duty
resulting from a
provisional bilateral safeguard measure already taken, the differential duty
collected shall be refunded to the importer.
14. Duration
(1) The bilateral safeguard measure applied under rule 11 shall be only
to the extent and for such period of time as may be necessary to prevent or remedy the serious injury and to facilitate
adjustment.
(2) Notwithstanding
anything contained in sub-rule (1) of this rule, the bilateral safeguard
measure applied under rule 11 shall not exceed a period of three years from the date of its
imposition:
Provided that in highly exceptional circumstances, the Central Government may extend
the period of bilateral safeguard imposition, on receipt of
the recommendation of the Director
General
under sub-rule (1) of
rule 16:
Provided further that the total duration of the bilateral safeguard measure, including
such extensions, shall not exceed five
years.
(3) No bilateral safeguard measure under these rules shall be
applied again to the import of a particular originating good which has been subject to such a bilateral safeguard measure, for a
period of time equal to that during which such measure had been previously applied, provided
that the period of non-application is at
least
one year.
15. Liberalisation of bilateral safeguard measure
If the duration of the
bilateral safeguard measure applied under rule 11 exceeds one year, the bilateral safeguard measure shall
be progressively liberalised
at regular intervals during the period of
its application.
16. Review
(1) The Director General may review the need for continued application of
the bilateral safeguard measure in terms of sub-rule (2)
of rule 14 and, if he is satisfied on the basis of information received
by
him that -
(a) the bilateral safeguard measure is necessary to prevent or remedy the serious injury and there is evidence that the domestic
industry is adjusting positively, he may recommend to the Central Government for
the continued imposition of bilateral safeguard
measure;
(b) there is no justification for the continued
imposition of such measure, recommend to the Central
Government for its withdrawal.
(2) The provisions of rules 4,
5, 6 and 10 shall, mutatis mutandis apply in the case of
review. [File No.528/23/2013-STO(TU)]