Madras High Court Puts a Temporary Stay on Levy of Safeguard Duty on Solar Imports

The Madras High Court has put a temporary stay on the recommendation to levy a 70 percent safeguard duty on the import of solar components to India.

The stay order was issued by Justice T. S. Sivagnanam of the Madras High Court. The court was listening to a petition filed by project developer Shapoorji Pallonji which requested that the court intervene in the matter.

In the order, Justice Sivagnanam stated, “This court is satisfied that the petitioner (Shapoorji Pallonji) has made a case for consideration. The levy of a safeguard duty has been stayed up to February 2, 2018, after which the Madras High Court will review the order.

In a preliminary finding, the Directorate General of Safeguards Customs and Central Excise had recommended a 70 percent safeguard duty on solar cells imported from China and Malaysia for a period of 200 days. The recommendation came after the Indian Solar Manufacturers Association (ISMA) filed a petition with the Directorate General of Safeguards Customs and Central Excise in December 2017, seeking the imposition of a safeguard duty on imported solar cells from China, Malaysia, Singapore and Taiwan.



An official at the Registrar’s office of the Madras High Court told Mercom, “The stay order will be in place up to February 2, 2018, after which the court will review it. The petitioner had stated that no time had been provided to respond to the Directorate General of Safeguards Customs and Central Excise’s order for the levy of 70 percent duty. With this stay order, the Madras High Court has provided that time.”

The rules state that all stakeholders have  30 days to respond to any petition submitted to the Directorate General of Safeguards Customs and Central Excise, but the office of Directorate General issued its order of preliminary findings in the first week of January, well ahead of the expiration of the mandated response time.

In the order, Justice Sivagnanam mentioned this anomaly as the chief reason behind the stay order on the levy of a 70 percent safeguard duty.

Unlike an anti-dumping duty, the safeguard duty can be levied once the preliminary finding is out.

When contacted, an official at the Directorate General of Safeguards Customs and Central Excise told Mercom, “Yes, the Honorable Madras High Court has put a stay on provisional levy of 70 percent duty on solar imports. Now all the developers, contractors, and not only Shapoorji Pallonji, can revert with their objections, and comments on our preliminary finding.”

“After that is done, the next step will be an open hearing; the observations made in the open hearing will be presented to a Board of Secretaries of various departments of the central government who will then take the final call,” added the official.

Most manufacturers in the country are not in favor of the imposition of duties on import of solar components as domestic cell manufacturing capacity is not yet sufficient to replace imports.

Image credit: Wikipedia