[TO
BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3,
SUB-SECTION (i)]
GOVERNMENT
OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
(Central Board of Excise and Customs)
NOTIFICATION
New
Delhi, the 21st June, 2017
No.
55/2017 - Customs (N. T.)
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 1st 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 Page 4
of 11 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);
(b) The
date of initiation of the investigation;
(c) The
period subject to the investigation;
(d) a
summary statement of the facts on which the allegation of serious Page 5 of 11
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 Page 8 of 11 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
Page 9 of 11 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
Page 10 of 11 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.
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