ORDER
1. The petitioners claiming to be domestic producers of yellow phosphorous complain that they have suffered serious injury on account of imports of the said item. They approached the Director General (Safeguards) as per the provisions of Safeguard Duty Rules framed under the Customs Tariff Act, 1975. The Director General (Safeguards) has given his final findings which have been challenged by the petitioners by way of present writ petition. The conclusion recorded in para 22 of the final findings of the Director General (Safeguards) is - "The domestic producers of White/Yellow Phosphorous have suffered serious injury caused by the increased imports of White/Yellow Phosphorous. It is, however, not in the public interest to impose Safeguard Duty on imports of White/Yellow phosphorous. No recommendation to impose Safeguard Duty on White/Yellow Phosphorous imported into India is, therefore, made."
2. It has been contended on behalf of the petitioners that having found that serious injury was caused to the domestic producers, the Director General was bound to make recommendation to the Central Government for levy of Safeguard Duty. Thus it is argued that the impugned order is without jurisdiction. Our attention has been invited to the relevant rules, i.e., Rules 4 and 11 of the Safeguard Duty Rules in this behalf.
"Rule 4 (4) to recommend :-
(i) the amount of duty which if levied would be adequate remove the injury or threat of injury to the domestic industry;
(ii) the duration of levy of safeguard duty and where the period so recommended is more than a year, to recommend progressive liberalisation adequate to facilitate positive adjustment."
3. Rule 11 is regarding final findings of the Director General. It is submitted that in view of Rule 11, the only option available to the Director General is to make recommendation for levy of Safeguard Duty.
4. Since advance copy of the writ petition was, served on the respondents, Mr. Jayant Bhushan, advocate has appeared on their behalf. He has drawn our attention to Sub-rule (2) of Rule 11 which runs as under :-
"The Director General shall also give its recommendation regarding amount of duty which, if levied, would be adequate to prevent or remedy serious injury and to facilitate positive adjustment."
5. On the basis of the said sub-rule it is submitted that duty of the Director General does not stop at merely recording a finding about serious injury. The Director General has to consider the effect of increased imports of the article under investigation as well as whether causal link exists between the increased imports and serious injury to the domestic industry. It is submitted that in view of these provisions the Director General before making recommendations for levy of Safeguard Duty has to consider all these aspects and it is in the background of these aspects he has to decide whether to make a recommendation for levy of duty or not. In other words it is submitted that recommendation regarding levy of duty is not a must.
6. Our attention has also been drawn to the observations of the Director General in para 21 of the report under the heading 'Public Interest' to the following effect :-
"It is also observed from the data furnished by UPL/SCIL that with all the proposed efforts to be made by them in reducing the cost of power and achieving higher production efficiencies, they may not be cost-competitive as compared to the imported Yellow Phosphorous, even after three years, the period for which imposition of safeguard duty has been requested. The major effort of UPL/SCIL is in improving the cost of power. They intend to reduce the cost of power in 3 years time from *** per unit to about ***(confidential) per unit. However, PACT who were getting power from the Kerala State Electricity Board at about Rs. 2.50 per unit which is much lower as compared to the cost of power to UPL/SCIL, are not able to produce Yellow Phosphorous at competitive prices. In fact due to higher cost of production they have stopped production of Yellow Phosphorous. It is, therefore, difficult to appreciate that even after three years indigenous Yellow Phosphorous can be made available to the domestic users/consumers at competitive prices."
7. In view of these findings, the decision of the Director General in not recommending levy of safeguard duty is sought to be justified.
8. We have considered all the aspects. In our view the provisions of Sub-rule (1) and Sub-rule (2) of Rule 11 give ample powers to the Director General to consider all the aspects of the matter before making recommendation about levy of Safeguard Duty. The use of the word recommend coupled with the fact that under the rules the Director has to consider other aspects, shows that the Director is not bound to make recommendation for levy of duty. The Rules envisage that he may not recommend levy of Safeguard Duty inspite of finding of serious injury to domestic industry and the causal link. We are unable to find any fault with the decision of the Director General in not recommending levy of Safeguard Duty. We cannot accept the argument advanced on behalf of the petitioners that in the event of recording a finding about serious injury to the domestic industry, the Director General has no jurisdiction except to make a recommendation for levy of Safeguard Duty.
9. The petition is accordingly dismissed in liming.