TaxTMI 
TaxTMI 
Safeguard Investigation concerning Imports of “Unwrought Aluminium (Aluminium not alloyed and Aluminium alloys)” into India- Preliminary Findings
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....0 for imposition of Safeguard Duty 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, Ex....
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.... the Customs Tariff (Identification and Assessment of Safeguard 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 t....
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....over supplied world Aluminium market. Since China has export tax on Ingots and 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 ....
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....ort Sales of DI Captive Consumption Sales of other Indian Producers Total Demand % of Market Share Import DI (excluding captive consumption) DI (including captive consumption) Others 2011-12 243 637 444 945 2,268 11 28 48 42 2012-13 308 718 568 997 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 b....
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....icant and the most dominant factor is profitability of the DI which has shown a serious downturn in the recent past due to increased imports arriving at depressed prices. In view of the above, it is seen that there is a deterioration in the financial parameters of the domestic industry causing losses to the DI due to which the domestic industry has suffered serious injury and immediate protection is required in the form of safeguard duty with a view to save the domestic industry from further injury. 18. Besides, threat of serious injury is also present in the current investigation. The imports of the PUC have increased significantly in absolute terms and in relation to production. As a result of significant surge in imports, the Domestic Industry has suffered serious injury and in all likelihood, the imports of the PUC will further increase and continue to threaten the domestic industry with serious injury. (IX) Causal Link between Increased 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 n....
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....orts and serious injury suffered by the domestic industry as imports increased by 78% during the year 2015-16(annualised) as compared to the base year 2011-12. This has affected the overall performance of the domestic industry which resulted in severe losses in the year 2015-16. It is therefore, evident that the injury suffered by DI is caused by increased imports. (X) Developing Nations: 22. The percentages of imports from developing nations have also been examined for the year 2015-16. Except Malaysia, South Africa and Thailand other developing nations individually and collectively have less than 3% and 9% share respectively of total imports into India. Therefore, in terms of Notification No.19/2016-Cus dated 05.02.2016 imports of the product under consideration originating from developing nations except Malaysia, South Africa and Thailand will not attract Safeguard Duty in terms of proviso to Section 8B (1) of the Customs Tariff Act, 1975. (XI) Critical Circumstances: 23. As per Rule 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 ta....