GOVERNMENT OF INDIA MINISTRY OF FINANCE (Department of Revenue)
(Central Board of Excise and Customs)
NOTIFICATION No. 55/2017 - Customs
(N. T.)
New Delhi, the 21st June, 2017
G.S.R.________(E).-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-Malaysia Comprehensive Economic Cooperation 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) “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;
(b) “domestic industry” means, with respect to an imported good, the
producers -
(i) as a whole of the like good or directly competitive good in India; or
(ii) whose collective production of the like good or directly competitive
good in India constitutes a major proportion of the total domestic production of
the such good in India.
(c) “good” means any merchandise, product, article or material;
(d) “increased imports” means increase in imports from Malaysia whether in
absolute terms or relative to domestic production;
(e) “interested party” includes, -
(i) any exporter or producer from Malaysia 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 good;
(ii) the Government of Malaysia; 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;
(f) “like good” means a good which is identical or alike in all respects to
the good under investigation;
(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 Preferential Trade Agreement between the Governments of the Republic
of India and Malaysia) Rules, 2011 notified vide notification of the Government
of India, Ministry of Finance, Department of Revenue, No. 43/2011 - Customs
(N.T.), dated 1st July, 2011, published vide number G.S.R. 500 (E), dated the
1lst July, 2011;
(h) “serious injury” means a significant overall impairment in the position
of a domestic industry;
(i) “threat of serious injury” means serious injury that is clearly imminent
and shall be determined on the basis of facts and not merely on allegation,
conjecture or remote possibility; and
(j) “Trade Agreement” means the Comprehensive Economic Cooperation Agreement
between the Government of the Republic of India and the Government of Malaysia.
(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._ 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 a domestic
industry as a result of reduction or elimination 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 that 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 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 domestic
industry caused by increased import of an originating good from Malaysia as a
result of reduction or elimination of a customs duty under the Trade Agreement;
(d) to recommend bilateral safeguard measure which if adopted would be
adequate to prevent or remedy serious injury;
(e) to recommend the duration of the bilateral safeguard measure and where
the period so recommended is more than one year, to recommend progressive
liberalisation necessary to facilitate adjustment; and
(f) to review the need for continuation of a bilateral safeguard measure.
4. Initiation of Investigation.-(1) 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 result of the reduction or
elimination of a customs duty under the Trade Agreement.
(2) An application under sub-rule (1) 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 and the alleged serious injury or threat
of serious injury; and
(iv) the reduction or elimination of a customs duty pursuant to the Trade
Agreement being a cause which contributes significantly to the increase in
imports of the originating good and such increase in imports is a cause of
serious injury or threat 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 being a cause which contributes significantly to the increase in
imports of the originating good: Provided that the cause of reduction or
elimination of a customs duty pursuant to 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 motu if he is satisfied with the information
received from any Principal Commissioner of Customs or 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 Investigations.- (1)The Director General shall, after
he has decided 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 reduction or
elimination of a customs duty under the Trade Agreement, issue a public notice
notifying the decision thereto and such 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);
(c) the period subject to the investigation;
(d) a summary statement of the facts on which the allegation of serious
injury or threat of serious injury is based;
(e) reasons 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 the known exporters of the
originating good, the increased import of which has been alleged to cause or
threaten to cause serious injury to the domestic industry;
(c) the Government of Malaysia; and
(d) any other interested parties, as the Director General 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 concerned trade associations or the known exporters of the
originating good, the increased import of which has been alleged to cause or
threaten to cause serious injury to the domestic industry; and
(c) the Government of Malaysia; and
(d) any other interested party upon request in writing.
(4) The Director General may issue a notice, calling for any information in
such form as may be specified in the notice from the exporters, producers and
Government of Malaysia and such information shall be furnished by such persons
and Government of Malaysia in writing 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 Page 6 of 11 appropriate diplomatic representative of the
Government of Malaysia.
(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 prescribed 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 the 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.
(9) The investigation shall be promptly
terminated without any bilateral safeguard measure being applied if imports
of the originating good from Malaysia represent less than three per cent. of
total imports of the good.
6. Confidential information.- (1)
Notwithstanding anything contained in subrules (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 that 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 due to
reduction or elimination of a customs duty pursuant to the Trade Agreement 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 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, where there is clear evidence that increased imports 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 which would be difficult to repair, may record a preliminary findings
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 Malaysia.
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 from the day when the bilateral
safeguard measure is taken; 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 custom 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 custom duty on the
originating good in effect on the day immediately preceding the date of the
start of the period of investigation.
(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 of its imposition. 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 have 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 reduction or elimination of a customs duty
pursuant to the Trade Agreement and serious injury or threat of serious
injury.
(2) The Director General shall also give his recommendation
regarding the bilateral safeguard measure which would be adequate to prevent
or remedy serious injury and to facilitate adjustment.
(3) The
Director General shall also make his recommendations regard ing 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 its application, adequate to facilitate
adjustment.
(4) The final findings shall contain information on all
matters of fact and law and reasons which have led to the conclusion.
(5) The Director General shall notify his final findings.
(6) The
Director General shall send a copy of the such notification of final findings
to:
(i) the Central Government in the Ministry of Commerce and Industry
and in the Ministry of Finance;
(ii) the Government of Malaysia.
11. Application of bilateral safeguard measure.-
(1) On receipt of
the recommendation of the Director General, in order to prevent or remedy
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 from the day when the bilateral
safeguard measure is taken; 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 custom 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 custom duty on the originating
good in effect on the day immediately preceding the date of the start of the
period of investigation.
(2) No bilateral safeguard measure under these
rules may be imposed in respect of a good on which actions under sub-section
(1) of section 8B of the Customs Tariff Act, 1975 (51 of 1975) is in place
and in the event of a safeguard duty being imposed in respect of a good under
sub-section (1) of section 8B of the Customs Tariff Act,1975 (51 of 1975), any
existing bilateral safeguard measure which has been imposed under these rules in
respect of that good shall be terminated prior to the imposition of the
action under the sub-section (1) of section 8B of the Customs Tariff Act,1975
(51 of 1975).
(3) On termination of a bilateral safeguard measure, the
rate of customs duty for an originating good subject to the measure shall be
the rate which would have been in effect under the Trade Agreement on the
date of termination as if the bilateral safeguard measure had never been
applied.
(4) In case, in the final finding of the Director General there
is no 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.
12. Date of commencement of bilateral
safeguard measure.- (1) The bilateral safeguard measure under rule 9 or rule
11 shall come into effect from the date of publication of the notification,
in the Official Gazette.
(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 notification imposing 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. Transition period.- No bilateral safeguard measure on an
originating good shall be taken after expiry of the transition period for
that originating good which shall be from the date of entry into force of the
Trade Agreement till seven years after the date of completion of tariff
reduction or completion of tariff elimination under the Trade Agreement, as
the case may be for that originating good.
15. Duration.- (1) The
suspension of the concessions granted under the provisions of the Trade
Agreement or 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 serious injury and to facilitate adjustment.
(2)
Notwithstanding anything contained in sub-rule (1), a bilateral safeguard
measure applied under rule 11 shall not exceed a period of two years from the
date of its imposition: Provided that the Central Government may, on the
receipt of recommendation of the Director General under sub-rule (1) of rule
17, extend the period of such imposition by a further period up to two years:
Provided further that the total duration of the bilateral safeguard measure,
including such extensions, shall not exceed four years.
(3)
Notwithstanding anything contained in sub-rule (1) and (2), the duration of
bilateral safeguard measure on an originating good shall terminate at the end of
the transition period for such originating good as specified in rule 14.
(4) No bilateral safeguard measure under these rules shall be applied again
to the import of an originating good that has previously been subject to such
bilateral safeguard measure for a period of one year from the date of expiry
of the bilateral safeguard measure and the duration of such bilateral
safeguard measure shall be less than the duration of the previous bilateral
safeguard measure on the same good.
16. Liberalisation of safeguard
measure.- If the duration of the application of bilateral safeguard measure
under rule 11 is more than one year, the bilateral safeguard measure shall be
progressively liberalised at regular intervals during the period of its
application, including the period of its extension.
17. Review.- (1) The Director General may review the need for continued
application of the bilateral safeguard measure and, if he is satisfied on the
basis of information received that -
(a) the bilateral safeguard measure is necessary to prevent or remedy serious
injury and there is evidence that the industry is adjusting, 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.
(Satyajit Mohanty) Director [F. No. 15021/20/2016 - Dir (ICD)]
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