TaxTMI 
TaxTMI 
Safeguard Investigation concerning Imports of “Unwrought Aluminium (Aluminium not alloyed and Aluminium alloys)” into India- Preliminary Findings
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....uty on imports of "Unwrought Aluminium ( Aluminium not alloyed and Aluminium alloys)" into India to protect the domestic producers of "Unwrought Aluminium ( Aluminium not alloyed and Aluminium alloys)" against serious injury /threat of serious injury caused by the increased imports of "Unwrought Aluminium ( Aluminium not alloyed and Aluminium alloys)". The domestic industry has also requested for imposition of provisional safeguard duty in view of steep deterioration in performance of the domestic industry as a result of increased imports of "Unwrought Aluminium ( Aluminium not alloyed and Aluminium alloys)". 2. In order to satisfy the requirements under Rule 5 of the said Safeguard Rules, the information presented by the applicant was verified to the extent considered necessary. The non-confidential version of verification report is kept in the public file. Having been satisfied that the requirements of Rule 5 were met with, safeguard investigation against imports of "Unwrought Aluminium ( Aluminium not alloyed and Aluminium alloys)" into India was initiated vide Notice of Initiation dated 19th April, 2016 and published in the Gazette of India, Extraordinary on the same day. 3. ....
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.... duty) Rules, 1997, the Agreement on Safeguards and the Article XIX of GATT do not specifically define what the Period of Investigation should be. From several case laws on safeguard measures, it is clear that neither the domestic laws on Safeguard nor Agreement on Safeguards and Article XIX of GATT provide specific guidelines on the period of investigation except the fact that the relevant investigation period should be sufficiently long to allow conclusion to be drawn on increased import and serious injury. The period of investigation in this case has been taken from 2011-12 to 2015-16 which is long enough to take into consideration the market conditions and to ascertain the need, if any, for imposition of Safeguard Duty. (IV) Source of Information: 10. The import data till January, 2016 for the PUC has been taken from Export Import data bank, Ministry of Commerce (http://www.commerce.nic.in/eidb/icomq.asp) and the domestic data from 2011-12 to 2015-16 has been submitted by the applicant and the same has been verified by the department on the basis of excise records and other records maintained by the units to the extent deemed necessary. (V) Confidentiality of Information sub....
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....tax rebate on value added products, the exports from China is taking place on value added products of Aluminium. Some of the value added products also known as fake semis are exported with a view to avail the export rebate and avoid export tax. These fake semis are ultimately meant for re-melting into Ingots at the place of destination. All this was unforeseen by the Domestic Industry (ii) On the other hand in the Middle East, a very significant increase in production capacity of Aluminium in the recent past, backed by very low energy cost, have resulted in surplus capacities at their end. With the already existing glut of Aluminium due to the excessive Chinese export to the world market, the Middle East producers have focussed their attention on the nearby freight friendly market of India. 14. It is observed that the above circumstances are unforeseen which has lead to significant increase in the imports of the PUC into India. (VII) Increased Imports: 15. Imports of PUC into India are as detailed below: Financial Year Total Import (MT) Import Indexed 2011-12 2,42,533 100 2012-13 3,08,279 127 2013-14 3,48,889 144 2014-15 3,43,428 142 2015-16 (April - Jan, 2016) ....
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....68 997 2,592 12 28 50 38 2013-14 349 671 619 940 2,579 14 26 50 36 2014-15 343 670 605 1,135 2,754 12 24 46 41 2015-16 432 (Annualised) 894 538 1,064 2,928 15 31 49 36 During the period 2011-12 to 2015-16 the demand of the PUC has increased. The market share of import (Annualised) has increased from 11% in 2011-12 to 15% in 2015-16. During the same period the share of DI increased from 28% to 31%. However, when seen along with captive consumption, the share of DI has increased only by 1%. d) Capacity Utilization: Even though there has been significant increase in demand of the PUC, the increasing imports have resulted in significant idling of production capacity of the domestic producers as can be seen in the Table below: Financial Year Installed Capacity (MT) Production (MT) Capacity Utilisation (%) Total Demand 2011-12 23,25,096 8,87,286 38 22,68,453 2012-13 23,17,954 9,31,776 40 25,91,862 2013-14 25,57,393 10,51,100 41 25,78,900 2014-15 29,04,841 13,53,271 47 27,54,114 2015-16 32,58,465 15,63,639 48 29,27,819 e) Profit/loss -The profitability of the DI has steeply deteriorated in 2015-16 and the DI has recorded....
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....reased Import and Serious injury or Threat of Serious injury: 19. The Panel on Korea - Dairy (Para's. 7.89-7.90) set forth the basic approach for determining "causation": "In performing its causal link assessment, it is our view that the national authority needs to analyse and determine whether developments in the industry, considered by the national authority to demonstrate serious injury, have been caused by the increased imports. In its causation assessment, the national authority is obliged to evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of that industry. In addition, if the national authority has identified factors other than increased imports which have caused injury to the Domestic Industry, it shall ensure that any injury caused by such factors is not considered to have been caused by the increased imports. To establish a causal link, Korea has to demonstrate that the injury to its Domestic Industry results from increased imports. In other words, Korea has to demonstrate that the imports of SMPP cause injury to the Domestic Industry producing milk powder and raw milk. In addition, having analyzed the situation of ....
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.... 2(b) of Custom Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 the "Critical circumstances" means circumstances in which there is clear evidence that imports have taken place in such increased quantities and under such circumstances as to cause or threaten to cause serious injury to the domestic industry and delay in imposition of provisional safeguard duty would cause irreparable damage to the domestic industry. 24. Rule 9 of Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 notified vide Notification No. 35/97-NT-Customs dated 29.07.1997 prescribes that the Director General shall proceed expeditiously with the conduct of the investigation and in critical circumstances, he/she may record a preliminary finding regarding "serious" or "threat of serious injury". The principles governing investigations have been provided in the Rule 6 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997. The harmonious reading of Rules 6 and 9 of the said Rules leads to a conclusion that the Rules provide for expeditious recommendation of provisional Safeguard duty based on preliminary findings. Rule 15 of the said Rules ....