WORLD TRADE G/SG/N/1/IND/2
14January 1998
ORGANIZATION(98-0102)
Original: English Committee onSafeguards
NOTIFICATIONS OFLAWS, REGULATIONS AND
ADMINISTRATIVE PROCEDURES RELATING
TOSAFEGUARD MEASURES
INDIA
Thefollowing communication, dated 18December 1997, hasbeenreceived fromthePermanent
Mission ofIndia.
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Inpursuance toArticle 12.6oftheAgreement onSafeguards, Iamtoforward herewith acopy
ofextracts from theFinance Bill,1997, containing amendment totheCustoms Tariff Act1975
incorporating provisions forimposition ofsafeguard duty, andalsoacopy ofCustoms Tariff
(Identification andAssessment ofSafeguard Duties) Rules 1997.G/SG/N/1/IND/2
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CUSTOMS BULLETIN
No.Cus. 5/97 Dated 28February 1997
EXTRACTS FROM THE FINANCE BILL, 1997
[BILL NO.25OF1997]
CHAPTER V
INDIRECT TAXES
Insertion ofnew
section 8B.Customs
78. IntheCustoms Tariff Act, 1975 (hereinafter
referred toastheCustoms Tariff Act), aftersection 8A,
thefollowing section shallbeinserted, namely:35
51of1975
Power ofCentral
Government to
impose safeguard
duty"8B. (1) IftheCentral Government, after
conducting suchenquiry asitdeems fit,issatisfied that
anyarticle isimported intoIndia insuch increased
quantities andunder such conditions soastocause or
threatening tocause serious injury todomestic industry,
then, itmay, bynotification intheOfficial Gazette,
impose asafeguard dutyonthatarticle:40
Provided thatnosuch dutyshall beimposed onan
article originating from adeveloping country solongas
theshare ofimports ofthatarticle from thatcountry does
notexceed three percent orwhere thearticle is
originating frommore thanonedeveloping country, then,
solong astheaggregate oftheimports from allsuch
countries taken together doesnotexceed ninepercentof
thetotalimports ofthatarticle intoIndia. 45
(2) TheCentral Government may, pending the
determination under sub-section (1),impose aprovisional
safeguard dutyunder thissub-section onthebasis ofa
preliminary determination thatincreased imports have
caused orthreatened tocause serious injury toadomestic
industry:
Provided thatwhere, onfinal determination, the
Central Government isoftheopinion thatincreased
imports have notcaused orthreatened tocause serious
injury toadomestic industry, itshallrefund thedutyso
collected:50
Provided further thattheprovisional safeguard duty
shallnotremain inforce formore thantwohundred days
from thedateonwhich itwasimposed.
(3)Thedutychargeable under thissection shallbein
addition toanyother duty imposed under thisActor
under anyother lawforthetimebeing inforce.55G/SG/N/1/IND/2
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(4)Thedutyimposed under thissection shall, unless
revoked earlier, cease tohaveeffect ontheexpiry offour
years from thedateofsuchimposition:
Provided thatiftheCentral Government isofthe
opinion thatthedomestic industry hastaken measures to
adjust tosuchinjury orthreat thereof anditisnecessary
thatthesafeguard dutyshould continue tobeimposed, it
mayextend theperiod ofsuchimposition:
5Provided further thatinnocasethesafeguard dutyshall
continue tobeimposed beyond aperiod oftenyears from
thedateonwhich suchdutywasfirstimposed.
10(5)TheCentral Government may, bynotification in
theOfficial Gazette, make rules forthepurposes ofthis
section, andwithout prejudice tothegenerality ofthe
foregoing, such rules may provide forthemanner in
which articles liable forsafeguard dutymaybeidentified
andforthemanner inwhich thecauses ofserious injury
orcauses ofthreat ofserious injury inrelation tosuch
articles maybedetermined andfortheassessment and
collection ofsuchsafeguard duty.
(6)Forthepurposes ofthissection:
(a)"developing country" means acountry notified by
theCentral Government intheOfficial Gazette forthe
purposes ofthissection;
(b)"domestic industry" means theproducers:
15 (i)asawhole ofthelikearticle oradirectly
competitive article inIndia; or
(ii)whose collective output ofthelikearticle or
adirectly competitive article inIndia constitutes amajor
share ofthetotalproduction ofthesaidarticle inIndia;
(c) "serious injury" means aninjury causing
significant overall impairment intheposition ofa
domestic industry;
20 (d) "threat ofserious injury" means aclear and
imminent danger ofserious injury.
(7)Every notification issued under thissection shall,
assoon asmaybeafteritisissued, belaidbefore each
House ofParliament".
79.TheCustoms Tariff Actshallbeamended inthe
manner specified intheSecond Schedule.Amendment ofAct51of
1975G/SG/N/1/IND/2
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Notification No.35-Cus(NT) dated 29July1997
Customs Tariff (Identification andAssessment ofSafeguard Duty) Rules, 1997
35-Cus(NT) Inexercise ofthepowers conferred bysubsection (5)ofsection 8BoftheCustoms
29.07.97 Tariff Act,1975 (51of1975) theCentral Government hereby makes thefollowing
rules, namely:
1. Short titleandcommencement
(i) These rules maybecalled theCustoms Tariff (Identification andAssessment of
Safeguard Duty) Rules, 1977.
(ii) They shallcome intoforce onthedateoftheirpublication intheOfficial Gazette.
2. Definitions -Inthese rules, unless thecontext otherwise requires:
(a) "Act" means theCustoms Tariff Act,1975 (51of1975);
(b) "critical circumstances" means circumstances inwhich there isclear evidence that
imports havetaken place insuchincreased quantities andunder suchcircumstances
astocause orthreaten tocause serious injury tothedomestic industry anddelay in
impositionofprovisionalsafeguarddutywouldcauseirreparabledamagetothedomestic
industry;
(c) "increased quantity" includes increase inimports whether inabsolute terms orrelative
todomestic production;
(d) "Interested Party" includes:
(i) anyexporter orforeign producer ortheimporter ofanarticle subjected to
investigation forpurposes ofimposition ofsafeguard dutyoratradeorbusiness
association, majority ofthemembers ofwhich areproducers, exporters or
importers ofsuchanarticle;
(ii) thegovernment oftheexporting country; and
(iii) aproducer ofthelikearticle ordirectly competitive article inIndia oratrade
orbusiness association, amajority ofmembers ofwhich produce ortrade the
likearticle ordirectly competitive article inIndia;
(e) "likearticle" means anarticle which isidentical oralikeinallrespects tothearticle
under investigation;
(f) "Provisional Duty" means asafeguard dutyimposed under subsection (2)ofsection
8BoftheAct;
(g) "Specified Country" means acountry orterritory which isamember oftheWorld
Trade Organization andincludes thecountry orterritory withwhich theGovernment
ofIndia hasanagreement forgiving itthemost-favoured-nation treatment;G/SG/N/1/IND/2
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(h) allwords andexpressions usedandnotdefined inthese rulesshallhavethemeanings
respectively assigned tothem intheAct.
3. Appointment ofDirector-General (Safeguard)
(1) TheCentral Government may,bynotification intheofficial Gazette, appoint anofficer
notbelow therankofaJoint Secretary totheGovernment ofIndia orsuchother officer asitmay
think fitastheDirector-General (Safeguard) hereinafter referred toastheDirector-General forthe
purposes ofthese rules.
(2) TheCentral Government mayprovide totheDirector-General theservices ofsuch
other persons andsuchother facilities asitdeems fit.
4. Duties oftheDirector-General -subject totheprovisions ofthese rules, itshallbetheduty
oftheDirector-General:
(1) toinvestigate theexistence of"serious injury" or"threat ofserious injury" todomestic
industry asaconsequence ofincreased import ofanarticle intoIndia;
(2) toidentify thearticle liable forsafeguard duty;
(3) tosubmit hisfindings, provisional orotherwise totheCentral Government astothe
"serious injury" or"threat ofserious injury" todomestic industry consequent upon
increased import ofanarticle from thespecified country.
(4) torecommend:
(i) theamount ofdutywhich iflevied would beadequate toremove theinjury
orthreat ofinjury tothedomestic industry;
(ii) theduration oflevyofsafeguard dutyandwhere theperiod sorecommended
ismore thanayear, torecommend progressive liberalization adequate to
facilitate positive adjustment.
(5) toreview theneedforcontinuance ofsafeguard duty.
5. Initiation ofinvestigation
(1) Except asprovided insub-rule (4)theDirector-General shall, onreceipt ofawritten
application byoronbehalf ofthedomestic producer oflikearticle ordirectly competitive article, initiate
aninvestigationtodeterminetheexistenceof"seriousinjury"or"threatofseriousinjury"tothedomestic
industry, caused bytheimport ofanarticle insuchincreased quantities absolute orrelative todomestic
production.
(2) Anapplication under sub-rule (1)shall beintheform asmaybespecified bythe
Director-General inthisbehalf andsuchapplication shallbesupported by:
(a) evidence of:
(i) increased imports;
(ii) serious injury orthreat ofserious injury tothedomestic industry;G/SG/N/1/IND/2
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(iii) acausal linkbetween imports andthealleged serious injury orthreat ofserious
injury; and
(b) astatement ontheefforts being taken, orplanned tobetaken, orboth, tomake a
positive adjustment toimport competition.
(3) TheDirector-General shallnotinitiate aninvestigation pursuant toanapplication made
under sub-rule (1)unless heexamines theaccuracy andadequacy oftheevidence provided inthe
application andsatisfies himself thatthere issufficient evidence regarding:
(a) increased imports;
(b) serious injury orthreat ofserious injury; and
(c) acausal linkbetween increased imports andalleged injury orthreat ofserious injury
(4) Notwithstanding anything contained insub-rule (1),theDirector-General mayinitiate
aninvestigation suomotu ifheissatisfied withtheinformation received from anyCommissioner of
CustomsappointedundertheCustomsAct,1962(52of1962)oranyothersourcethatsufficientevidence
exists asreferred toinclause (a),clause (b)andclause (c)ofsub-rule (3).
6. Principles governing investigations
(1) TheDirector-General shall, afterhehasdecided toinitiate investigation todetermine
theserious injury orthreat ofserious injury todomestic industry, consequent upontheincreased import
ofanarticle intoIndia, issue apublic notice notifying hisdecision thereto. Thepublic notice shall,
interalia,contain adequate information onthefollowing, namely:
(i) thename oftheexporting countries andthearticle involved;
(ii) thedateofinitiation oftheinvestigation:
(iii) asummary statement ofthefactsonwhich theallegation ofserious injury orthreat
ofserious injury isbased;
(iv) reasons forinitiation ofinvestigation;
(v) theaddress towhich representations byinterested parties should bedirected; and
(vi) thetimelimits allowed tointerested parties formaking theirviews known.
(2) Acopyofthepublic notice shallbeforwarded bytheDirector-General totheCentral
Government intheMinistry ofCommerce andother Ministries concerned, known exporters ofthe
article theincreased import ofwhich hasbeenalleged tocause orthreaten tocause serious injury to
thedomestic industry, thegovernments oftheexporting countries concerned andotherinterested parties.
(3) TheDirector-General shallalsoprovide acopyoftheapplication referred toinsub-
rule(1)ofrule5to:
(i) theknown exporters, ortheconcerned trade association;
(ii) thegovernments oftheexporting countries; andG/SG/N/1/IND/2
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(iii) theCentral Government intheMinistry ofCommerce;
Provided thattheDirector-General shallalsomake available acopyoftheapplication, upon
request inwriting, toanyother interested party.
(4) TheDirector-General mayissue anotice calling foranyinformation insuchformas
maybespecified byhimfromtheexporters, foreign producers andgovernments ofinterested countries
andsuchinformation shallbefurnished bysuchpersons andgovernments inwriting within 30days
fromthedateofreceipt ofthenotice orwithin suchextended period astheDirector-General mayallow
onsufficient cause being shown.
Explanation: Forthepurpose ofthisrulethepublic notice andotherdocuments shallbedeemed
tohavebeenreceived oneweek afterthedateonwhich these documents were sentbytheDirector-
General byregistered postortransmitted totheappropriate diplomatic representative oftheexporting
country.
(5) TheDirector-General shallalsoprovide opportunity totheindustrial userofthearticle
under investigation, andtorepresentative consumer organizations incaseswhere thearticle iscommonly
soldatretail leveltofurnish information which isrelevant totheinvestigation.
(6) TheDirector-General mayallow aninterested party oritsrepresentative topresent
theinformation relevant totheinvestigation orally butsuchoralinformation shall betaken into
consideration bytheDirector-General onlywhen itissubsequently submitted inwriting.
(7) TheDirector-Generalshallmakeavailabletheevidencepresentedtohimbyoneinterested
party totheother interested parties, participating intheinvestigation.
(8) Incasewhere aninterested party refuses access toorotherwise doesnotprovide
necessary information within areasonable period orsignificantly impedes theinvestigation, theDirector-
General may record hisfindings onthebasis ofthefacts available tohimandmake such
recommendations totheCentral Government ashedeems fitunder suchcircumstances.
7. Confidential information
(1) Notwithstanding anything contained insub-rules (1),(3)and(7)ofrule6,sub-rule (2)
ofrule9andsub-rule (5)ofrule11,anyinformation which isbynature confidential orwhich isprovided
onaconfidential basisshall, uponcause being shown, betreated assuchbytheDirector-General and
shallnotbedisclosed without specific authorization oftheparty providing suchinformation.
(2) TheDirector-General mayrequire theparties providing information onconfidential
basis tofurnish non-confidential summary thereof andif,intheopinion oftheparty providing such
information, suchinformation cannot besummarized, suchparty maysubmit totheDirector-General
astatement ofreasons whysummarization isnotpossible.
(3) Notwithstanding anything contained insub-rule (2),iftheDirector-General issatisfied
thattherequest forconfidentiality isnotwarranted orthesupplier oftheinformation isunwilling either
tomake theinformation public ortoauthorize itsdisclosure inageneralized orsummary form, he
maydisregard suchinformation unless itisdemonstrated tohissatisfaction fromappropriate sources
thatsuchinformation iscorrect.G/SG/N/1/IND/2
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8. Determination ofserious injury orthreat ofserious injury
TheDirector-General shalldetermine serious injury orthreat ofserious injury tothedomestic
industry taking intoaccount, interalia,theprinciples laiddown intheAnnex tothese rules.
9. Preliminary findings
(1) TheDirector-General shallproceed expeditiously withtheconduct oftheinvestigation
andincritical circumstances, hemayrecord apreliminary finding regarding serious injury orthreat
ofserious injury.
(2) TheDirector-General shallissue apublic notice regarding hispreliminary findings.
(3) TheDirector-General shallsendacopyofthepublic notice totheCentral Government
intheMinistry ofCommerce andintheMinistry ofFinance.
10. Levy ofprovisional duty
TheCentral Government mayinaccordance withtheprovisions ofsubsection (2)ofsection 8B
oftheAct,impose aprovisional dutyonthebasisofthepreliminary findings oftheDirector-General:
Provided thatsuchdutyshallremain inforce onlyforaperiod notexceeding 200daysfrom
thedateonwhich itwasimposed.
11. Final findings
(1) TheDirector-General shall, within eight months from thedateofinitiation ofthe
investigation orwithin suchextended period astheCentral Government mayallow, determine whether:
(a) theincreased imports ofthearticle under investigation hascaused orthreatened tocause
serious injury tothedomestic industry; and
(b) acausal linkexists between theincreased imports andserious injury orthreat ofserious
injury.
(2) TheDirector-General shallalsogiveitsrecommendation regarding amount ofduty
which, iflevied, would beadequate toprevent orremedy serious injury andtofacilitate positive
adjustment.
(3) TheDirector-General shallalsomake hisrecommendations regarding theduration of
levyofduty:
Provided thatwhere theperiod recommended ismore thanoneyear,theDirector-General shall
alsorecommend progressive liberalization adequate tofacilitate positive adjustment.
(4) Thefinalfindings ifaffirmative, shallcontain allinformation onthematter offacts
andlawandreasons which haveledtotheconclusion.
(5) TheDirector-General shallissue apublic notice recording hisfinalfindings.
(6) TheDirector-General shallsendacopyofthepublic notice regarding hisfinalfindings
totheCentral Government intheMinistry ofCommerce andintheMinistry ofFinance.G/SG/N/1/IND/2
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12. Levy ofduty
(1) TheCentral Government mayimpose, byanotification intheOfficial Gazette, upon
importation intoIndia oftheproduct covered under thefinalfinding, asafeguard dutynotexceeding
theamount which hasbeenfound adequate toprevent orremedy serious injury andtofacilitate positive
adjustment.
(2) Ifthefinalfinding oftheDirector-General isnegative, thatiscontrary totheprima
facieevidenceonwhosebasistheinvestigationwasinitiated,theCentralGovernmentshallwithin30days
ofthepublication offinalfindings bytheDirector-General under rule11,withdraw theprovisional
dutyimposed, ifany.
13. Imposition ofdutyonnon-discriminatory basis
Anysafeguard dutyimposed under rule10orrule12shallbeonanon-discriminatory basis
andapplicable toallimports ofsucharticle, irrespective ofitssource.
14. Dateofcommencement ofduty
(1) Thesafeguard dutylevied under rule10orrule12shalltakeeffect from thedateof
publication ofthenotification, intheOfficial Gazette imposing suchduty.
(2) Notwithstanding anything contained insub-rule (1),where aprovisional dutyhasbeen
levied andwhere theDirector-General hasrecorded afinding thatincreased imports havecaused or
threatentocauseseriousinjurytodomesticindustry,itshallbespecifiedinthenotificationundersub-rule
(1)thatsuchsafeguard dutyshalltakeeffect from thedateoflevyofprovisional duty.
15. Refund ofduty
Ifthesafeguard dutyimposed aftertheconclusions oftheinvestigation islower thanthe
provisional dutyalready imposed andcollected, thedifferential shallberefunded totheimporter.
16. Duration
(1) Thedutylevied under rule12shallbeonlyforsuchperiod oftimeasmaybenecessary
toprevent orremedy serious injury andtofacilitate positive adjustment.
(2) Notwithstanding anything contained insub-rule (1)ofthisruledutylevied under rule12
shall, unless revoked earlier, cease tohaveeffect ontheexpiry offouryears from thedateofits
imposition:
Provided thatiftheCentral Government isoftheopinion thatthedomestic industry hastaken
measures toadjust tosuchinjury orthreat thereof anditisnecessary thatthesafeguard dutyshould
continue tobeimposed, itmayextend theperiod ofsuchimposition:
Provided further thatinnocasethesafeguard dutyshallcontinue tobeimposed beyond aperiod
oftenyears from thedateonwhich suchdutywasfirstimposed.
17. Liberalization ofduty
Iftheduration ofthedutylevied under rule12exceeds oneyear,thedutyshallbeprogressively
liberalized atregular intervals during theperiod ofitsimposition.G/SG/N/1/IND/2
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18. Review
(1) TheDirector-General shall, fromtimetotime,review theneedforcontinued imposition
ofthesafeguard dutyandshall, ifheissatisfied onthebasis ofinformation received tohimthat:
(i) safeguard dutyisnecessary toprevent orremedy serious injury andthere isevidence
thattheindustry isadjusting positively, itmayrecommend totheCentral Government
forthecontinued imposition ofduty;
(ii) there isnojustification forthecontinued imposition ofsuchduty, recommend tothe
Central Government foritswithdrawal:
Provided thatwhere theperiod ofimposition ofsafeguard dutyexceeds threeyears theDirector-
General shallreview thesituation notlaterthanthemid-term ofsuchimposition and,ifappropriate,
recommend forwithdrawal ofsuchsafeguard dutyorfortheincrease oftheliberalization ofduty.
(2) Anyreview initiated under sub-rule (1)shallbeconcluded within aperiod notexceeding
eight months fromthedateofinitiation ofsuchreview orwithin suchextended period astheCentral
Government mayallow.
(3) Theprovisions ofrules5,6,7and11shallmutatis mutandis apply inthecaseofreview.
Annex (seerule8)
(1) Intheinvestigationtodeterminewhetherincreasedimportshavecausedorarethreatening
tocause serious injury toadomestic industry, theDirector-General shallevaluate allrelevant factors
ofanobjective andquantifiable nature having abearing onthesituation ofthatindustry, inparticular,
therateandamount oftheincrease inimports ofthearticle concerned inabsolute andrelative terms,
theshare ofthedomestic market taken byincreased imports, changes inthelevelofsales, production,
productivity, capacity utilization, profits andlosses, andemployment.
(2) Thedetermination referred toinparagraph (1)shallnotbemade unless theinvestigation
demonstrates, onthebasis ofobjective evidence, theexistence ofthecausal linkbetween increased
imports ofthearticle concerned andserious injury orthreat thereof. When factors other thanincreased
imports arecausing injury tothedomestic industry atthesametime, suchinjury shallnotbeattributed
toincreased imports. Insuchcases, theDirector-General mayrefer thecomplaint totheauthority
foranti-dumping orcountervailing dutyinvestigations, asappropriate.
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