The Delhi High Court has held that the safeguard measures to protect domestic industry cannot be whittled down by ‘transition provisions’.
The bench of Justice Sachin Datta has observed that It cannot be lost sight of, particularly in the contemporary global trade context, that the leeway afforded to contracting states under Article IX of General Agreement on Tariffs and Trade (GATT 1994) to take action to protect their domestic industry, cannot be whittled down by holding that safeguard measures be subject to ‘transition provision/s’. The same is not mandated or contemplated under Article IX of GATT, 1994 nor under Section 9A of the Foreign Trade (Development and Regulation) Act (FTDR).
The bench noted that the petitioners have already imported 2,70,121 MT of LAM Coke from Indonesia uptill 31st December, 2024, i.e. in the current financial year (2024- 25). The quantity already imported by Petitioners in the current financial year is more than the aggregate of the total imports from Indonesia in the last three financial years (2021-22, 2022-23 & 2023-24).
The genesis of the controversy involved in the preset case is that on 30.06.2023, the Directorate General of Trade Remedies (DGTR) issued a notification initiating a safeguard investigation concerning the imports of LAM Coke into India.
This investigation, which focused on imposing quantitative restrictions, was initiated under Rule 5 of the Safeguard Measures (Quantitative Restrictions) Rules, 2012. Subsequently, on 29.04.2024, the DGTR, through its final finding, recommended the imposition of quantitative restrictions on the import of LAM Coke into India.
Subsequently, on 26.12.2024, based on the DGTR’s recommendations, the Central Government issued Notification No. 44/2024- 25, introducing quantitative restrictions on the import of LAM Coke from various countries. As per the notification, these restrictions became effective from 01.01.2025.
The petitioner contended that It is contended that the petitioners’ ICLCs were opened when the import policy with respect to importation of LAM Coke was under the ‘free category’. The notification imposing quantitative restriction was issued only on 26.12.2024. In other words, the import continued to be ‘free’ till the notification date.
The petitioner contended that reliance is placed on Para 1.05(b) of the Foreign Trade Policy, 2023 which states that if an import policy is shifted from ‘free’ to ‘restricted,’ imports made on or after the date of such restriction will still be permitted for importers who have a commitment through an ICLC opened before the restriction’s imposition. Furthermore, paragraph 1.05(b) of the FTP requires such importers to register their ICLCs with the relevant regional authority within 15 days of the restriction being imposed.
The court noted that the right and power of contracting states to take emergency action to protect its domestic industry in a situation where any goods are being imported in the territory of the contracting party in such increased quantities and under such conditions as to cause serious injury to the domestic producers.
The court did not find merit in the petitions; consequently dismissed.
Case Details
Case Title: JSW Steel Limited Versus Union Of India
Case No.: W.P.(C) 1685/2025
Date: 28.03.2025
Counsel For Petitioner: Ramesh Singh, Sr. Adv.
Counsel For Respondent: Nidhi Raman
Read More: Quoting Pink Floyd’s Lyrics Gujarat High Court Quashes A Decade Old Customs SCN [READ ORDER]
