TaxTMI 
TaxTMI 
2020 (1) TMI 211
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.... as the "domestic industry"). Counsel for the parties were heard on the question of grant of interim relief, which the petitioner seeks which is to clear goods imported without payment of safeguard duty. 3. The petitioner challenges a final notification issued on 16-7-2018 by the Director General of Trade Remedies (hereafter referred to as "final findings") recommending the levy of safeguard duty at the rates specified therein. These findings become embodied in Notification No. 1/2018-Customs (SG), dated 30-7-2018 (hereafter referred to as "impugned notification") which levied safeguard duty at the rates prescribed in regard to the import of solar cells whether or not assembled in modules or panels (hereafter referred to as "the goods"). 4. The relevant facts relating to the culmination of the final findings and the imposition of safeguard duty are that at the behest of the domestic industry, investigation was launched for the periods 2014-15 to 2017-18, regarding the need to initiate proceedings for the levy of safeguard duty under Section 8B of the Customs Tariff Act, 1975 (hereafter "CTA" or "the Act"). Under Section 8B of the Act the Central Government after enq....
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....e High Courts granted relief to the extent that consignments were permitted to be cleared upon payment of 50% of the demand towards safeguard duty and the balance through bank guarantee. It is submitted that a similar approach too should be adopted in this case. It is submitted that in the earlier writ petition (i.e. D.B. Civil Writ Petition No. 12257/2019), a Division Bench of this Court has adopted the same approach and granted interim relief to the same extent. 8. The Learned Senior Counsel for the writ petitioner submitted that the conclusion of the second respondent (hereafter "DG") that serious injury was caused to the domestic industry because of large amount of imports from China and Malaysia, is manifestly unreasonable and contrary to the record. It is pointed out that the DG failed to evaluate all relevant factors of objective and quantifiable nature, having regard to the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 (hereinafter referred to as "the Rules"). It was argued that the evaluation failed to notice that the Central Government's policy increased the target of solar power generation in the country from 20 GW to 100 GW in 2022....
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.... for the sudden increase in imports. Counsel stated that the reason was that the domestic industry was unable to cope with the demand. It was pointed out that the domestic sales of the Indian producers increased by 143 MW in 2014-15 to 785 MW in 2017-18. The demand on the other hand for the relative period, was 1419 MW in 2014-15 as against 10618 [MW] in 2017-18. It was argued that the DG held, without basis that the increase in the production capacity of China and imposition of trade remedy measures by the EU and USA on imports from China was unforeseen developments that led to the increase of imports. Such a finding is illogical and flawed and failed to take into consideration the fact that India had committed to achieving solar power of 100 GW by the year 2022 and that this was announced on 1-7-2015. In order to achieve this objective, there was a considerable increase in the number of power projects set up from 6 bids in 2013-14 to 17 bids in the year 2015 and it was this increase that led to the increase in demand. However, the domestic industry could not match this demand. Therefore, the demand had to be met through imports. The increase in imports was therefore due to an inc....
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.... dated 7-5-2019 in Jupiter Solar Power Limited v Union of India [Civil Application (For Vacating Interim Relief) No. 2/2019 in R/Special Civil Application No. 20957/2018] vacated an interim order suspending full payment of safeguard duty and had, instead granted the facility of paying 50% of the duty and the balance through bank guarantee. It was submitted that this aspect has been suppressed from this Court. 16. The relevant provisions of the Act are as follows : "SECTION 8B. Power of Central Government to impose safeguard duty. - (1) If the Central Government, after conducting such enquiry as it deems fit, is satisfied that any article is imported into India in such increased quantities and under such conditions so as to cause or threatening to cause serious injury to domestic industry, then, it may, by notification in the Official Gazette, impose a safeguard duty on that article : Provided that no such duty shall be imposed on an article originating from a developing country so long as the share of imports of that article from that country does not exceed three per cent. or where the article is originating from more than one developing countries, t....
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....be adequate to prevent or remedy serious injury and to facilitate positive adjustment. (3) The Director General shall also make his recommendations regarding the duration of levy of duty : Provided that where the period recommended is more than one year, the Director General shall also recommend progressive liberalisation adequate to facilitate positive adjustment. (4) The final findings if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion. (5) The Director General shall issue a public notice recording his final findings. (6) The Director General shall send a copy of the public notice regarding his final findings to the Central Government in the Ministry of Commerce and in the Ministry of Finance. ************          ************ ANNEXURE (See Rule 8) (1) In the investigation to determine whether increased imports have caused or are threatening to cause serious injury to a domestic industry, the Director General shall evaluate all relevant factors of an objective and quantifia....
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....bjections to the preliminary findings are recorded in extenso [para 14 (ix)(a) to (v) of the final findings]. 20. The DG's final findings recorded elaborate reasons from para-45 onwards after analyzing the rival contentions that India had committed to address global warming and consequently set a target of achieving 100 GW through solar power by 2022, an aspect which pushed up the demand of solar power generation projects. At the same time, the DG noticed that imports of the product took place at a very low price. Per watt cost of cells had diminished significantly from Rs. 18.96 (in 2014-15) to Rs. 13.61 (in 2017-18). Solar modules likewise came down from Rs. 36.18 per unit to Rs. 22.63 per unit for the same period. It was further noticed that the market share of the domestic sale which stood at 10% in 2014-15 had dipped as much low as 4% in 2015-16 and remained stable in the last year 2017-2018. The domestic demand correspondingly had increased from 1419 MW to 10618 MW. 21. The observations in para 49(2), in the opinion of the Court belies the submission made that the sales were not taken into account in terms of absolute figures. The Director General took note of....
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....he domestic industry has been able to demonstrate that the developments in the market on surge in imports of the PUC were unforeseen in the context of Article XIX of GATT. (iv) There will be some impact on the Solar Power Developers and also ultimate consumer as a result of safeguard duty on the PUC. (v) It is however concluded that imposition of safeguard duty in this case would be in public interest because it will prevent complete erosion of manufacturing base of Solar industry in the country which is upcoming and holds promise for a stronger manufacturing base in the country in future, at the same time, it is also in the public interest, to prevent undue escalation of Solar power cost, tariff to the final customer and that attainment of the target of 100 GW of Solar Power Deployment by 2022 is not derailed. The consideration of two competing interests require a balanced view. (vi) From the analysis of post-POI data, it has been observed that the position of domestic industry further deteriorated on account of continued low price of import of PUC which....
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....determined and shall be effective from such date as may be decided by the MERC." Therefore, it is evident that the petitioner would not be prejudiced, because it has negotiated a condition that the impact of the levy is not borne by it. Furthermore, this court also notices that being an indirect tax, the levy is borne by the ultimate consumer; the petitioner, as supplier would factor in the tax impact in the cost. 27. This Court is unpersuaded with the submission that the Bombay High Court and its Nagpur Bench granted interim relief or that the Andhra Pradesh High Court granted certain interim relief whereby a facility of clearing goods by only paying 50% duty was granted - balance was to be secured by bank guarantee. A careful reading of those orders reveal that the concerned High Court, with respect did not choose to adduce any reason, but took into consideration, solely the impact of the safeguard duty. No consideration about the prima facie strength of the petitioner's arguments, or how the balance of convenience was in its favour, has been recorded in those orders. 28. This aspect and the other relevant aspects were considered by the Gujarat High Court in Ju....
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....during the period of investigation and that there was a significant price undercutting by the imported goods throughout the POI and that it was evident that the high level of price undercutting prevented the domestic industry from increasing their prices as a result of which they suffered losses. The Director General has further found that the continued price undercutting has finally led to a situation where the domestic industry is not able to raise prices above the landed value and that the threat of serious injury is established. In paragraph 52 of the final findings, the Director General has recorded the factors relevant in regard to determining the cause and effect relationship of increased imports and the serious injury during the POI and the threat of serious injury in the future to domestic industry, wherein it has been inter alia recorded that the imports have increased significantly in absolute terms; the market share of imports has increased and consequently the market share of domestic industry had declined : the imports are available at prices lower than the selling price of the domestic industry and are also decreasing over the time, the consumers are switching over t....
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....lectricity who may bear the brunt of safeguard measures in form of increased electricity tariff. Thus, from the facts as emerging from the record it is clear that the Director General has considered all relevant parameters in the final findings. As to whether such findings are justified having regard to the material on record, would be required to be gone into at the stage of final hearing of the petition. 24. Insofar as the question of balance of convenience is concerned, if the petitioner continues to make imports by simply executing a bond, the operation of the final findings in effect and substance remain stayed and the domestic industry does not get any benefit under the impugned notification and final findings. In the opinion of this court, when the Director General (Safeguard) has found that the domestic industry has suffered injury and also faces threat of serious injury, if the ad interim relief granted earlier is continued, the domestic industry would continue to suffer such injury and may collapse under the impact of the onslaught of imports. On the other hand, insofar as the importers are concerned, the Government of India in the Ministry of Power by a com....