Orissa High Court Safeguard Duty Case

The Orissa High Court today heard the petition filed against the levy of safeguard duty and fixed September 19, 2018, as the next date of hearing for the case. This means the safeguard duty imposition will be on hold until September 19th.

When contacted, Mercom’s source at one of the petitioners said, “There was no new order or communication from the court. They have just set the next hearing date as September 19 and the status quo remains in place.”

Background

Recently, the Ministry of Finance announced the levy of a 25 percent safeguard duty based on the final recommendations proposed by the DGTR. The duty came into effect from July 30, 2018.


The ministry levied the duty despite an Orissa High Court order that put a stay on the implementation of the safeguard duty on solar modules and cells. ACME Solar had filed a petition after the DGTR recommendations and received the stay order from the court. The court had then directed the government not to issue any notification regarding the safeguard duty until August 20, 2018

After the sudden imposition of the duty, Hero Future Energies, ACME Solar and Vikram Solar filed new petitions in the Orissa High Court opposing it.

Then, the Orissa High Court heard the petition filed by Hero Future Energies, ACME, and Vikram Solar against the Directorate General of Trade Remedies (DGTR). Noting that the safeguard duty notification was issued by the ministry despite the court’s stay order on any further notifications until August 20, the bench directed it to withdraw the notification for now.

Then, considering the recent stay order put in force by the Orissa on the safeguard duty notification, the Ministry of Finance announced that the government will, for the time being, not insist on the payment of safeguard duty on solar imports. The ministry clarified that imported solar cells and modules will be assessed provisionally on furnishing a simple letter of undertaking or bond.

This further adds to speculation surrounding the safeguard duty. In spite of the announcement of the duty, the Indian solar sector seems to be shrugging off the effect until now.

Recently, for instance, the lowest (L1) tariff of ₹2.59 (~$0.0372)/kWh was quoted in the auction held by the National Thermal Power Corporation (NTPC) to develop 2 GW of interstate transmission system (ISTS)-connected solar photovoltaic (PV) projects.

On August 20, 2018, the Orissa High Court had fixed August 27, 2018, as the next date of hearing for the case. This case is dragging on and is adding to the uncertainties.