[Federal Register Volume 68, Number 130 (Tuesday, July 8, 2003)]
[Notices]
[Pages 40629-40637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17216]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-533-829]


Notice of Preliminary Affirmative Countervailing Duty 
Determination: Prestressed Concrete Steel Wire Strand from India

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of Preliminary Affirmative Countervailing Duty 
Determination.

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EFFECTIVE DATE: July 8, 2003.

Preliminary Determination

    The Department of Commerce (the Department) preliminarily 
determines that countervailable subsidies are being provided to 
producers and exporters of prestressed concrete steel wire strand (PC 
strand or subject merchandise) from India. For information on the 
estimated countervailing duty rates, please see the ``Suspension of 
Liquidation'' section of this notice.

FOR FURTHER INFORMATION CONTACT: Robert Copyak at (202) 482-2209, 
Alicia Kinsey at (202) 482-4793, or Cindy Robinson at (202) 482-3797, 
Office of AD/CVD Enforcement VI, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, Room 
4012, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230.

SUPPLEMENTARY INFORMATION: 

Petitioners

    The petition in this investigation was filed by American Spring 
Wire Corp., Insteel Wire Products Company, and Sumiden Wire Products 
Corp. (collectively, the petitioners).

Case History

    Since the publication of the notice of initiation in the Federal 
Register (see Notice of Initiation of Countervailing Duty 
Investigation: Prestressed Concrete Steel Wire Strand from India, 68 FR 
9058 (February 27, 2003) (Initiation Notice)), the following events 
have occurred.
    On February 28, 2003, we issued our initial countervailing duty 
questionnaire (initial questionnaire) to the Government of India 
(GOI).\1\ On April 1, 2003, the GOI requested a one-month extension of 
the April 7, 2003, deadline for submitting its response to the 
``government'' portion of the initial questionnaire. We granted the GOI 
an extension until April 21, 2003. On April 21, 2003, the GOI submitted 
a partial questionnaire response and requested a second extension. The 
GOI explained that it was having logistical difficulties in gathering 
the requested information, which pertains to several state government 
programs and various federal departments. See Memorandum to the File 
from Alicia Kinsey, International Trade Analyst, concerning 
Conversation with Government of India Official (April 24, 2003), which 
is on

[[Page 40630]]

file in room B-099 of the Central Records Unit of the Main Commerce 
Building (CRU). See also ``Use of Adverse Facts Available'' section, 
below.
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    \1\ In the questionnaire, we informed the GOI that it was the 
government's responsibility to identify all Indian producers/
exporters that shipped subject merchandise to the United States 
during the period of investigation and to forward a copy of the 
``company'' portion of the initial questionnaire to all such 
producers/exporters.
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    On April 25, 2003, we informed the GOI that its April 21, 2003, 
partial questionnaire response was incomplete and unusable for purposes 
of calculating a countervailing duty rate, and we again extended the 
deadline for submitting a complete questionnaire response until April 
30, 2003. On April 28, 2003, the GOI submitted another partial 
questionnaire response. However, the GOI did not file any more 
submissions and thus did not meet the April 30, 2003, deadline for 
filing a complete questionnaire response. On May 23, 2003, in a second 
attempt to obtain the information we requested in the initial 
questionnaire, we issued a supplemental questionnaire to the GOI. The 
GOI's supplemental questionnaire response was due on June 6, 2003. The 
GOI did not submit a response to the supplemental questionnaire. See 
``Use of Adverse Facts Available'' section, below.
    As of April 7, 2003, which was the original deadline for the 
submission of responses to the initial questionnaire, we had not 
received any responses from any Indian producers/exporters of the 
subject merchandise. On April 14, 2003, we spoke with a law firm which 
had entered an appearance in the investigation on behalf of Tata Inc. 
(importer of subject merchandise) and Tata SSL Ltd. (producers/
exporters of subject merchandise) and inquired whether the law firm 
intended to file a response on these companies' behalf. The law firm 
informed us that it had not submitted any responses on behalf of Tata 
Inc. and Tata SSL Ltd. because the companies were proceeding with the 
investigation on a pro se basis. See Memorandum to the file from Robert 
Copyak, Financial Analyst, concerning Conversation with Former Counsel 
to Tata (April 24, 2003). On April 15, 2003, on the basis of their 
recent change to pro se status, we granted Tata Inc. and Tata SSL Ltd. 
an extension until April 30, 2003, to file a response to the initial 
questionnaire.
    On April 16, 2003, we spoke with a company official who stated that 
the companies never received the initial questionnaire. See Memorandum 
to the File from Alicia Kinsey, International Trade Analyst, concerning 
April 16, 2003 Conversation with Tata Official (April 24, 2003). On 
April 21, 2003, we spoke with the GOI official who had been 
coordinating the GOI's involvement in the investigation. He explained 
that the GOI had not distributed a copy of the initial questionnaire to 
Tata Inc. and Tata SSL Ltd. Subsequently, the Department provided Tata 
Inc. And Tata SSL Ltd. an electronic version of the questionnaire. See 
Memorandum to the File from Alicia Kinsey, International Trade Analyst, 
concerning Conversation with Government of India Official (April 24, 
2003). See also ``Use of Adverse Facts Available'' section, below.
    On April 29, 2003, Tata Inc. and Tata SSL Ltd. requested another 
extension of the deadline for submitting responses to our initial 
questionnaire. On April 30, 2003, we extended the deadline to May 7, 
2003.On May 7, 2003, respondents' former counsel again entered an 
appearance on behalf of Tata Inc. and Tata SSL Ltd.. On May 8, 2003, 
Tata Iron and Steel Company Limited (Wire Division) (TISCO), which 
recently acquired Tata SSL Ltd., submitted a response to the initial 
questionnaire. Although the submission was filed one day after the 
deadline, we accepted it as timely because the company informed us that 
the delay was the fault of the courier. However, we returned the 
submission to TISCO for correction and re-submission because it was 
improperly filed and was not served on interested parties. See 
Memorandum to the File from Robert Copyak and Alicia Kinsey, Case 
Analsyts, through Melissa Skinner, Office Director, concerning 
Acceptance and Request for Correction and Re-submission of the May 8, 
2003, Questionnaire Response Submitted by TISCO (May 23, 2003). TISCO 
corrected its May 8, 2003, submission and re-submitted it on May 28, 
2003. On May 29, 2003, we issued a supplemental questionnaire to TISCO, 
and TISCO submitted a timely response on June 12, 2003.
    On June 16, 2003, petitioners submitted a letter urging the 
Department to use facts available for purposes of the preliminary 
determination. See ``Use of Adverse Facts Available'' section, below. 
On June 23, 2003, respondent's counsel contacted a Department official 
to inform the Department that respondent's counsel had received a tax 
return requested in our initial and supplemental questionnaires to 
TISCO; we informed respondents' counsel that if they were to submit the 
tax return, it would be rejected by the Department as untimely filed. 
See Memorandum to the File from Robert Copyak, Financial Analyst, 
through Jim Terpstra, Program Manager regarding Conversation with 
Garvey Schubert Barer, Counsel for Tata Iron and Steel Company Limited 
(Wire Division) (June 23, 2003).

Extension of Time Limit for Preliminary Determination

    On April 7, 2003, we published in the Federal Register an extension 
of the due date for this preliminary determination from April 28, 2003, 
to June 30, 2003. See Prestressed Concrete Steel Wire Strand from 
India: Extension of Time Limit for Preliminary Determination in 
Countervailing Duty Investigation, 68 FR 16783 (April 7, 2003).

Scope of the Investigation

    The merchandise subject to this investigation is prestressed 
concrete steel wire (PC strand), which is steel strand produced from 
wire of non-stainless, non-galvanized steel, which is suitable for use 
in prestressed concrete (both pre-tensioned and post-tensioned) 
applications. The product definition encompasses covered and uncovered 
strand and all types, grades, and diameters of PC strand.
    The merchandise under this investigation is currently classifiable 
under subheadings 7312.10.3010 and 7312.10.3012 of the Harmonized 
Tariff Schedule of the United States (HTSUS). Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the merchandise under investigation is 
dispositive.
    In the scope section of the Initiation Notice for this 
investigation, the Department encouraged all parties to submit comments 
regarding product coverage by March 19, 2003. Petitioners filed 
comments regarding product coverage on June 13, 2003. These comments 
were submitted too late for consideration in this preliminary 
determination. The Department will examine these comments for the Final 
Determination.

Injury Test

    Because India is a ``Subsidy Agreement Country'' within the meaning 
of section 701(b) of the Tariff Act of 1930, as amended (the Act), the 
International Trade Commission (ITC) is required to determine whether 
imports of the subject merchandise from India materially injure or 
threaten material injury to a U.S. industry. On March 21, 2003, the ITC 
published its preliminary determination finding that there is a 
reasonable indication that an industry in the United States is being 
materially injured, or threatened with material injury, by reason of 
imports of subject merchandise from India. See Prestressed Concrete 
Steel Wire Strand from Brazil, India, Korea, Mexico, and Thailand, 68 
FR 13952 (March 21, 2003).

[[Page 40631]]

Alignment With Final Antidumping Duty Determination

    On June 26, 2003, petitioners submitted a letter requesting 
alignment of the final determination in this investigation with the 
final determination in the companion antidumping duty investigation. 
Therefore, in accordance with section 705(a)(1) of the Act, we are 
aligning the final determination in this investigation with the final 
determination in the antidumping duty investigation of prestressed 
concrete steel wire strand from India.

Period of Investigation

    The period of investigation (POI) is April 1, 2001 through March 
31, 2002. This period was alleged by petitioners to be the Indian 
producers'/exporters' most recently completed fiscal year. See the 
Initiation Notice and the February 20, 2003, Office of AD/CVD 
Enforcement VI Initiation Checklist titled ``Initiation of 
Countervailing Duty Investigation: Prestressed Concrete Steel Wire 
Strand from India (C-533-829)''(Initiation Checklist), which is on file 
in the CRU.

Use of Adverse Facts Available

    We preliminarily determine that the GOI and TISCO's questionnaire 
responses are incomplete and unusable, for the reasons set forth below. 
Therefore, for this preliminary determination, we have calculated a 
single countervailing duty rate that is applicable to all Indian 
producers/exporters of subject merchandise. Accordingly, we also 
preliminarily determine to base the calculation of this one rate on 
facts available, pursuant to section 776(a) of the Act, and adverse 
inferences, pursuant to section 776(b) of the Act (hereafter ``adverse 
facts available'').
    Despite our repeated requests and numerous extensions described 
above, the GOI and the Indian exporters/producers of subject 
merchandise have not provided the requested program information and 
company-specific data necessary for calculating company-specific 
countervailing duty rates.
    We requested in the initial questionnaire that the GOI provide 
basic information regarding the production of subject merchandise in 
India and the administration of the federal and state programs that we 
are investigating. As described above, although the GOI provided two 
partial questionnaire responses, these submissions are incomplete and 
unusable because they contain only a small portion of the information 
we requested in the initial questionnaire. The GOI did not provide 
complete answers and did not provide useable information. Moreover, the 
GOI failed to answer specific questions regarding the nature of and 
participants in India's PC strand industry and failed to answer 
specific questions regarding the various federal and state programs 
under investigation. The GOI also failed to distribute the ``company'' 
portion of the questionnaire to the producers/exporters of subject 
merchandise.
    In a supplemental questionnaire, we requested that the GOI provide 
all of the information it had neglected to provide in its two partial 
questionnaire responses. Despite this second opportunity to provide the 
information requested in the initial questionnaire and the additional 
time to provide it, the GOI did not file a response and therefore did 
not provide the information necessary to conduct this countervailing 
duty investigation.
    Similarly, the questionnaire responses provided by TISCO are 
incomplete and unusable. Despite several extensions, TISCO failed to 
provide answers to specific questions regarding its use of various 
federal and state programs under investigation. Most notably, however, 
TISCO failed to provide the information requested regarding its 
affiliated and parent companies. In addition, TISCO failed to submit 
its tax returns, as requested in the Tax Programs Appendix of the 
initial questionnaire. A copy of the company's tax return is necessary 
for ascertaining whether the company claimed a tax exemption for export 
profits under section 80 HHC of the India Tax Act. As mentioned in the 
``Case History'' section, above, counsel for TISCO acquired a copy of 
TISCO's tax return and offered to file it on the record; however, the 
information, for which the Department had not granted an extension, 
would have been filed nearly two weeks after the supplemental 
questionnaire was due, and less than a week before this preliminary 
determination was issued. TISCO had the opportunity to provide its tax 
return in the initial questionnaire, for which two extensions were 
granted, and in the supplemental questionnaire. Despite these numerous 
opportunities, TISCO did not submit its tax return. The Department's 
statutory obligations require a reasonable cut-off point for new 
information to be submitted on the record and considered; therefore, 
the Department did not solicit TISCO's tax return upon learning of its 
availability. TISCO also failed to submit any information regarding 
most of the state programs under investigation. TISCO also did not 
submit adequate information regarding the Pre-shipment and Post-
shipment Export Financing program.
    In a supplemental questionnaire, we requested the above-mentioned 
information. Although TISCO provided some additional information, the 
company did not submit its tax returns, did not provide any additional 
information about the state programs, did not provide information about 
their affiliate and parent companies, and did not supplement its 
previously-submitted information regarding the Pre-shipment and Post-
shipment Export Financing program. Moreover, all of the information 
submitted in both the initial and supplemental questionnaires was 
generated from the Indian fiscal year 2002-2003, a fiscal year that was 
not yet completed when the original questionnaire was issued. 
Respondents did not consult with Department officials regarding their 
definition of the period of investigation. The information provided by 
the GOI covered the POI as identified in the questionnaire.
    Section 776(a) of the Act requires the use of facts available when 
an interested party withholds information that has been requested by 
the Department, or when an interested party fails to provide the 
information requested in a timely manner and in the form required. As 
described above, the GOI and TISCO, as well as any other Indian 
producers or exporters of the subject merchandise, have failed to 
provide the information regarding the programs under investigation that 
the Department expressly requested in the initial and supplemental 
questionnaires. Because of TISCO's and the GOI's lack of cooperation, 
the statute requires the use of facts otherwise available for purposes 
of calculating the countervailing duty rates in this investigation.
    Furthermore, section 776(b) of the Act provides that in selecting 
from among the facts available, the Department may use an inference 
that is adverse to the interests of a party if it determines that a 
party has failed to cooperate to the best of its ability. The 
Department finds that by not providing necessary information 
specifically requested by the Department in this investigation, despite 
numerous opportunities, the GOI and TISCO have failed to cooperate to 
the best of their ability. As discussed above, the GOI failed to act to 
the best of its ability by not distributing the questionnaires to 
Indian producers/exporters of subject merchandise, not providing 
necessary information specifically requested in the questionnaire, and 
not responding to the Department's supplemental questionnaire. TISCO 
also failed to act

[[Page 40632]]

to the best of its ability by not providing necessary information 
specifically requested in the questionnaire and supplemental 
questionnaire, despite numerous extensions, and by submitting 
information using a different POI without consulting the Department. 
Therefore, in selecting facts available, the Department determines that 
an adverse inference is warranted.
    Section 776(b) of the Act indicates that, when employing an adverse 
inference, the Department may rely upon information derived from (1) 
the petition; (2) a final determination in a countervailing duty or an 
antidumping investigation; (3) any previous administrative review, new 
shipper review, expedited antidumping review, section 753 review; or 
(4) any other information placed on the record. See also 19 CFR 
Sec. 351.308(c).
    If the Department relies on this secondary information as facts 
available, section 776(c) of the Act provides that the Department 
shall, ``to the extent practicable,'' corroborate such information 
using independent sources reasonably at its disposal. The Statement of 
Administrative Action accompanying the URAA (SAA) further provides that 
to corroborate secondary information means that the Department will 
satisfy itself that the secondary information to be used has probative 
value. See also, 19 CFR 351.308(d). Thus, in those instances in which 
the Department determines to apply adverse facts available, in order to 
satisfy itself that such information has probative value, the 
Department will examine, to the extent practicable, the reliability and 
relevance of the information used. However, unlike other types of 
information, such as publicly available data on the national inflation 
rate of a given country or national average interest rates, there are 
typically no independent sources for data on company-specific benefits 
resulting from countervailable subsidy programs. The only source for 
such information normally is administrative determinations. With 
respect to the relevance aspect of corroboration, the Department will 
consider information reasonably at its disposal as to whether there are 
circumstances that would render benefit data not relevant. See Cotton 
Shop Towels From Pakistan: Final Results of Countervailing Duty 
Administrative Review, 66 FR 42514 (August 13, 2001). However, the fact 
that corroboration may not be practicable in a given case does not 
prevent the Department from applying an adverse inference as 
appropriate, and does not prevent the Department from using the 
secondary information. See 19 CFR 351.308(d). The SAA accompanying the 
URAA clarifies that information from the petition is ``secondary 
information.'' See Statement of Administrative Action, accompanying 
H.R. 5110 (H. Doc. No. 103-316) (1994) at 870.
    Because the respondents failed to act to the best of their ability, 
as discussed above, for each program examined, unless the record 
information made it clear that respondents could not have received 
benefits from the program, we made the adverse inference that the 
respondent benefitted from the program, consistent with our practice. 
See, e.g., Certain Cold-Rolled Carbon Steel Flat Products From Korea; 
Final Affirmative CVD Determination, 67 FR 62102 (October 3, 2002). 
Therefore, as adverse facts available, we preliminarily determine to 
use (where possible) the highest company-specific program rates from 
the most recently-completed investigation pertaining to exports of an 
Indian steel product see Final Affirmative Countervailing Duty 
Determination: Certain Hot-Rolled Carbon Steel Flat Products From 
India, 66 FR 49635 (September 28, 2001) (Hot-Rolled Steel From India) 
and Issues and Decision Memorandum: Final Results of the Countervailing 
Duty Investigation: Certain Hot-Rolled Carbon Steel Flat Products From 
India, which is on file in the CRU or available online at http://www.ia.ita.doc.gov/frn/summary/india/01-24404-1.txt (Hot-Rolled Steel 
From India Decision Memo). Because some of the programs under 
investigation were not investigated in Hot-Rolled Steel From India, 66 
FR 49635, we preliminarily determine, consistent with our practice, to 
use (where possible) the highest company-specific program rates from 
another recently-completed Indian investigation. See Notice of Final 
Affirmative Countervailing Duty Determination: Polyethylene 
Terephthalate Film, Sheet, and Strip From India, 67 FR 34905 (May 16, 
2002) (PET Film From India) and Issues and Decision Memorandum: Final 
Countervailing Duty Determination: Polyethylene Terephthalate Film, 
Sheet, and Strip (PET Film) From India, which is on file in the CRU or 
available online at http://ia.ita.doc.gov/frn/summary/india/02-12294-1.txt (PET Film From India Decision Memo). See also Final Affirmative 
Countervailing Duty Determination: Stainless Steel Sheet and Strip in 
Coils From the Republic of Korea, 64 FR 30636 (June 8, 1999) (Sheet and 
Strip from Korea).
    To corroborate the secondary information that Indian producers/
exporters of subject merchandise are eligible to use and may have 
benefitted from these programs, we reviewed the federal and state 
industrial policy and tax bulletins that were submitted on the record 
by petitioners (in the petition) and by the GOI and the Indian 
producers/exporters in their questionnaire responses. We also reviewed 
official government correspondence and records kept by administering 
authorities. We note that many of these documents were examined at the 
respective verifications. See Hot-Rolled Steel From India, 66 FR 49635, 
and PET Film From India, 67 FR 34905. Based on our review of these 
documents, these rates are neither unduly harsh nor punitive, and 
because they have been corroborated, continue to have probative value.
    With respect to two of the programs we have previously examined, 
Tax Deductions under Section 80HHC of the India Tax Act and the State 
of Maharastra Capital Incentive Scheme, we were unable to use company-
specific program rates from Hot-Rolled Steel From India and PET Film 
From India because the Department determined that the programs were not 
used during the POIs of those cases. As adverse facts available for 
these two programs, we preliminarily determine to use program rates of 
2.00 percent ad valorem, which is the de minimis rate for developing 
countries. See Section 703(b)(4)(B). To corroborate our adverse 
inference that Indian producers/exporters of subject merchandise are 
eligible to use and may have benefitted from these programs, we 
reviewed the federal and state industrial policy and tax bulletins that 
were submitted on the record by petitioners (in the petition) and by 
GOI and the Indian producers/exporters in their questionnaire 
responses. We also reviewed official government correspondence and 
records kept by administering authorities. We note that many of these 
documents were examined at the respective verifications. See Hot-Rolled 
Steel From India, 66 FR 49635, and PET Film From India, 67 FR 34905. 
Based on our review of these documents, these rates are neither unduly 
harsh nor punitive, and because they have been corroborated, continue 
to have probative value.
    For each program that we have not examined in previous 
investigations or administrative reviews, we preliminarily determine to 
use an adverse facts available program rate of 2.00 percent ad valorem. 
See ``Programs Previously Not Examined'' section, below. In selecting 
this rate, we relied on the information put forth by petitioners. In a 
letter to the Secretary of Commerce dated June 16, 2003, petitioners 
argue for the application of

[[Page 40633]]

the de minimis rate for developing countries for each program in which 
the respondents failed to provide the necessary information to 
calculate a countervailing duty rate. See petitioners' June 16, 2003 
letter; see also Section 703(b)(4)(B). To ensure that respondents are 
provided an incentive to respond in the future, and because ``in 
employing adverse inferences, one factor [the Department] will consider 
is the extent to which a party may benefit from its own lack of 
cooperation,'' we have preliminarily determined it was reasonable to 
apply the 2.00 percent rate. (SAA at 870.) Because we have no 
information on these programs, it was not practicable in this case to 
corroborate the 2.00 percent rate with anything other than the general 
information (i.e., various federal and state industrial policy 
bulletins) used for the allegations in the petition. See Sheet and 
Strip Korea, 64 FR 30636. Based on the record of this case, we regard 
the petition a practicable source for corroboration, because 
information in the petition is reliable and relevant, and there is no 
record information showing otherwise. See 19 CFR 351.308(c)(2)(d). 
Therefore, we conclude that because TISCO and the GOI failed to 
cooperate to the best of their ability, we are making an adverse 
inference that a program rate of 2.00 percent ad valorem might reflect 
the level of benefit they are receiving. To corroborate our adverse 
inference that Indian producers/exporters of subject merchandise are 
eligible to use and may have benefitted from these programs, we 
reviewed the federal and state industrial policy and tax bulletins that 
were submitted on the record by petitioners in the petitions. Based on 
this review, these rates are neither unduly harsh nor punitive, and 
because they have been corroborated, continue to have probative value.

Programs Previously Determined To Be Countervailable

    As explained in the Initiation Notice and in the Initiation 
Checklist, this investigation includes several programs that were 
determined to be countervailable in previous investigations and 
administrative reviews. No new information or evidence of changed 
circumstances has been submitted in this investigation to warrant 
reconsideration of those determinations. Therefore, in accordance with 
section 771(5A)(B) of the Act, we continue to determine that the 
following programs are countervailable. Full descriptions of each 
program are provided in the Initiation Checklist. See Hot-Rolled Steel 
From India, 66 FR 49635, and Pet Film From India, 67 FR 34905, for the 
Department's determinations of countervailaibility for each of these 
programs.

A. Government of India Programs

1. Pre-shipment and Post-shipment Export Financing
    The Reserve Bank of India (RBI), through commercial banks, provides 
short-term pre-shipment financing, or ``packing credits,'' to 
exporters. Post-shipment export financing consists of loans in the form 
of discounted trade bills or advances by commercial banks.
    The Department has previously determined that this export financing 
is countervailable to the extent that the interest rates are set by the 
GOI and are lower than the rates exporters would have paid on 
comparable commercial loans. See, Hot-Rolled Steel From India, 66 FR 
49635, and Pet Film From India, 67 FR 34905, and Final Affirmative 
Countervailing Duty Determination: Certain Cut-to-Length Carbon-Quality 
Steel Plate From India, 64 FR 73137 (December 29, 1999) (CTL Plate From 
India). Specifically, the Department determined that the GOI's issuance 
of financing at preferential rates constituted a financial contribution 
pursuant to section 771(5)(D)(i) of the Act. See the ``Pre-Shipment and 
Post-Shipment Export Financing'' section of the PET Film From India 
Decision Memo. The Department further determined that the interest 
savings under this program conferred a benefit pursuant to section 
771(5)(E)(ii) of the Act. Id. In addition, the Department determined 
this program, which is contingent upon exports, to be specific within 
the meaning of section 771(5A)(B) of the Act. Id.
    As adverse facts available for pre-shipment export financing, we 
preliminary determine to use a rate of 1.32 percent ad valorem, which 
is the highest company-specific program rate calculated in Hot-Rolled 
Steel From India, 66 FR 49635. As adverse facts available for post-
shipment export financing, we preliminary determine to use a rate of 
0.74 percent ad valorem, which is the highest company-specific program 
rate calculated in Hot-Rolled Steel From India, 66 FR 49635.
2. Duty Entitlement Passbook Scheme (DEPS)
    India's DEPS was enacted on April 1, 1997, as a successor to the 
Passbook Scheme (PBS). As with PBS, the DEPS enables exporting 
companies to earn import duty exemptions in the form of passbook 
credits rather than cash. All exporters are eligible to earn DEPS 
credits on a post-export basis, provided that the exported product is 
listed in the GOI's Standard Input/Output Norms (SIONs). Post-export 
DEPS credits can be used for any subsequent imports, regardless of 
whether they are consumed in the production of an export product. Post-
export DEPS credits are valid for 12 months and are transferable. 
Exporters were eligible to earn credits equal to certain percent of the 
f.o.b. value of their export shipments.
    The Department has previously determined that the DEPS is 
countervailable. See, Hot-Rolled Steel From India, 66 FR 49635 and Pet 
Film From India, 67 FR 34905. In PET Film From India, the Department 
determined that (1) under the DEPS, a financial contribution, as 
defined under section 771(5)(D)(ii) of the Act, is provided because the 
GOI provides credits for the future payment of import duties; (2) since 
the GOI does not have in place and does not apply a system to confirm 
which inputs, and in what amounts, are consumed in the production of 
the exported products that is reasonable and effective for the purposes 
intended, under section 351.519(a)(4) of the Department's regulations 
and section 771(5)(E) of the Act, the entire amount of import duty 
exemption earned during the POI constitutes a benefit; and (3) this 
program can only be used by exporters and, therefore, is specific under 
section 771(5A)(B) of the Act. See the ``DEPS'' section of the PET Film 
From India Decision Memo, on file in the CRU.
    As adverse facts available for the DEPS, we preliminary determine 
to use a rate of 13.98 percent ad valorem, which is the highest 
company-specific program rate calculated in Hot-Rolled Steel From 
India, 66 FR 49635.
3. Export Promotion Capital Goods Scheme (EPCGS)
    The EPCGS provides for a reduction or exemption of customs duties 
and an exemption from excise taxes on imports of capital goods. Under 
this program, producers may import capital equipment at reduced rates 
of duty by undertaking to earn convertible foreign exchange equal to 
four to five times the value of the capital goods within a period of 
eight years. For failure to meet the export obligation, a company is 
subject to payment of all or part of the duty reduction, depending on 
the extent of the export shortfall, plus penalty interest.
    In previous investigations, we determined that producers/exporters 
benefit from the waiver of import duty on imports of capital equipment. 
A

[[Page 40634]]

second type of benefit conferred under this program involves the import 
duty reductions that producers/exporters received on the imports of 
capital equipment for which producers/exporters have not yet met their 
export requirements. For those capital equipment imports, producers/
exporters have unpaid duties that will have to be paid to the GOI if 
the export requirements are not met. When a company has an outstanding 
liability and the repayment of that liability is contingent upon 
subsequent events, our practice is to treat any balance on that unpaid 
liability as an interest-free loan. See 19 CFR Sec. 351.505(d)(1). See 
Hot-Rolled Steel From India, 66 FR 49635, and Pet Film From India, 67 
FR 34905, and CTL Plate From India, 64 FR 73137.
    In PET Film From India, the Department determined that (1) the 
receipt of benefits under this program is contingent upon export 
performance in accordance with section 771(5A)(B) of the Act; (2) the 
GOI provided a financial contribution under section 771(5)(D)(ii) of 
the Act in the two ways described above; and (3) the program provides 
benefits under section 771(5)(E) of the Act. See the ``Export Promotion 
of Capital Goods Scheme (EPCGS)'' section of the Pet Film From India 
Decision Memo.
    As adverse facts available for the EPCGS, we preliminary determine 
to use a rate of 16.63 percent ad valorem, which is the highest 
company-specific program rate calculated in Hot-Rolled Steel From 
India, 66 FR 49635.
4. Loans From the Steel Development Fund (SDF)
    Under the SDF program, companies that contributed to the fund are 
eligible to take out long-term loans at advantageous rates. In order to 
create the SDF, the GOI, acting through the Joint Planning Commission, 
mandated steel p price increases which were earmarked for the SDF. In 
previous investigations, the Department determined that this program is 
countervailable. Under section 771(5)(B) of the Act, a subsidy can be 
found whenever the government makes a financial contribution, when it 
provides a payment to a funding mechanism to provide a financial 
contribution, or when it entrusts or directs a private entity to make a 
financial contribution. Therefore, in Hot-Rolled Steel From India, we 
found that SDF loans constituted a financial contribution and conferred 
a benefit within the meaning of section 771(5)(D(i) and (E)(ii) of the 
Act, respectively. See ``Comment 1: Steel Development Loans and Loan 
Forgiveness''of the Hot-Rolled Steel From India Decision Memo. Because 
eligibility for loans from the SDF is limited to steel companies, we 
also determined that loans under this program are specific within the 
meaning of 771(5A)(D)(i) of the Act. See Hot-Rolled Steel From India, 
66 FR 49635, and the ``Comment 1: Steel Development Loans and Loan 
Forgiveness'' section in the Hot-Rolled Steel From India Decision Memo.
    As adverse facts available for the SDF Loan program, we preliminary 
determine to use a rate of 0.99 percent ad valorem, which is the 
highest company-specific program rate calculated in Hot-Rolled Steel 
From India, 66 FR 49635.
5. Exemption of Export Credit From Interest Taxes
    Under the Interest Tax Act of 1974, a tax is levied on the 
chargeable interest accruing to a credit institution in a given year. 
Under Section 28 of the Income Tax Act, the GOI may exempt any credit 
institution or class of credit institutions, or the interest on any 
category of loan or advances from the levy of the interest tax. 
Pursuant to this section of the Income Tax Act, the GOI has exempted 
working capital loans taken from banks for supporting exports from the 
interest tax. Loans obtained by producers/exporters of subject 
merchandise from banks under the pre- and post-shipment export 
financing program are covered by this exemption. All producers/
exporters of subject merchandise are eligible to use this program.
    In Hot-Rolled Steel From India, we determined that this program is 
contingent upon export performance and, therefore, is specific in 
accordance with section 771(5A)(B) of the Act. See ``Comment 13: 
Exemption of Export Credit From Interest Tax'' of Hot-Rolled Steel From 
India Decision Memo. We have also determined that the GOI provided a 
financial contribution under section 771(5)(D)(ii) of the Act and that 
the program provides a benefit under section 771(5)(E) of the Act. See 
Hot-Rolled Steel From India, 66 FR 49635.
    As adverse facts available for the Exemption of Export Credit From 
Interest Taxes program, we preliminary determine to use a rate of 0.08 
percent ad valorem, which is the highest company-specific program rate 
calculated in Hot-Rolled Steel From India, 66 FR 49635.
6. Advance Licenses
    Under India's Duty Exemption Scheme, exporters may also import 
inputs duty-free through the use of import licenses. Using advance 
licenses, companies are able to import inputs ``required for the 
manufacture of goods'' without paying India's basic customs duty.
    In Hot-Rolled Steel From India, the Department determined that the 
use of advance licenses was countervailable. See the ``Advance 
Licenses'' section of the Hot-Rolled Steel From India Decision Memo. 
The program is contingent upon export performance and, therefore, is 
specific in accordance with section 771(5A)(B) of the Act. Under the 
program, the GOI provides a financial contribution under section 
771(5)(D)(ii) of the Act, and the program provides a benefit under 
section 771(5)(E) of the Act. See Hot-Rolled Steel From India, 66 FR 
49635.
    As adverse facts available for the Advance Licenses program, we 
preliminary determine to use a rate of 0.24 percent ad valorem, which 
is the highest company-specific program rate calculated in Hot-Rolled 
Steel From India, 66 FR 49635.
7. Income Tax Exemption Scheme (Section 80 HHC)
    In Certain Iron-Metal Castings From India: Final Results of 
Countervailing Duty Administrative Review (Iron-Metal Castings from 
India), 65 FR 31515 (May 18, 2000), the Department determined that 
deductions of profit derived from exports under section 80HHC of 
India's Income Tax Act are countervailable. The program is contingent 
upon export performance and, therefore, is specific in accordance with 
section 771(5A)(B) of the Act. Under the program, the GOI provides a 
financial contribution under section 771(5)(D)(ii) of the Act, and the 
program provides a benefit under section 771(5)(E) of the Act.
    Although in Hot-Rolled Steel From India, 66 FR 49635, and PET Film 
From India, 67 FR 34905, we determined that the producers and exporters 
of subject merchandise did not use this program, we initiated an 
investigation of this program because the Department has not made a 
determination that the program has been terminated.
    As adverse facts available for this program, we preliminarily 
determine to use a rate of 2.00 ad valorem, which is the de minimis 
rate for developing countries.
8. Loan Guarantees From the GOI
    The GOI provides loan guarantees on a case-by-case basis. Loan 
guarantees are normally extended to ``Public Sector Companies'' in 
particular industrial sectors. In Hot-Rolled Steel From India, we 
determined, in accordance with section 771(5)(D)(i) of the Act, that 
GOI loan guarantees conferred

[[Page 40635]]

countervailable subsidies because they result in a financial 
contribution by the government in the form of revenue forgone and, in 
accordance with section 771(5)(E) of the Act, provide a benefit to the 
recipient in the amount of the interest tax savings. Moreover, we 
determined that the receipt of the loan guarantees were limited to 
certain companies selected by the GOI on an ad hoc basis and, thus, we 
found the program to be specific under section 771(5A)(D)(iii)(II) of 
the Act.
    As adverse facts available for the GOI Loan Guarantee program, we 
preliminary determine to use a rate of 0.19 percent ad valorem, which 
is the highest company-specific program rate calculated in Hot-Rolled 
Steel From India, 66 FR 49635.

B. State of Maharastra (SOM) Programs

1. Sales Tax Incentives
    Petitioners allege that incentives offered by the SOM under the 
Industrial Policy of Maharashtra 1993 provide either exemption or 
deferral of state sales taxes. Under this program, companies are 
exempted from paying state sales taxes on purchases and collecting 
sales taxes on sales; or, as an alternative, recipients are allowed to 
defer submitting sales taxes collected on sales to the SOM for ten to 
twelve years. After the deferral period expires, the companies are 
required to submit the deferred sales taxes to the SOM in equal 
installments over five to six years. Petitioners claim that producers 
of subject merchandise received countervailable benefits under this 
program. In addition, petitioners argue that although this program 
appears to be discontinued pursuant to the Industrial Policy of 
Maharashtra 2001, respondents nonetheless may have benefitted during 
the POI from either the deferral or the exemption of the sales tax.
    In PET Film from India, the Department determined the program to be 
specific within the meaning of section 771(5A)(D)(iv) of the Act 
because the benefits are limited to industries located within 
designated geographical areas. The Department also determined that the 
SOM provided a financial contribution under section 771(5)(D)(i) of the 
Act in the form of uncollected interest and that the program conferred 
benefits under section 771(5)(E) of the Act. See the ``Sales Tax 
Incentives'' section of the PET Film from India Decision Memo.
    As adverse facts available for this SOM program, we preliminary 
determine to use a rate of 2.39 percent ad valorem, which is the 
highest company-specific program rate calculated in PET Film From 
India, 67 FR 34905.
2. Capital Incentive Scheme
    Petitioners allege that companies operating in specific areas of 
the SOM are eligible to receive capital incentives in the form of 
either cash grants (of up to 3,000,000 rupees) or sales tax incentives. 
Petitioners allege that producers of subject merchandise received 
countervailable benefits under this program.
    In PET Film From India , the Department determined that this 
program is countervailable. We determined that the program is specific 
under section 771(5A)(D)(iv) of the Act because it is limited to 
industries located in designated geographical areas within the SOM. We 
further determined that the program provides a financial contribution 
under section 771(5)(D)(i) of the Act in the form of a direct transfer 
of funds from the SOM and conferred a benefit under 771(5)(E) of the 
Act. Although we determined that the producers and exporters of PET 
film did not use this program, we initiated an investigation of this 
program because the Department has not made a determination that the 
program has been terminated.
    As adverse facts available for this SOM program, we preliminary 
determine to use a rate of 2.00 percent ad valorem, which is the de 
minimis rate applicable for developing countries.
3. Electricity Duty Exemption Scheme
    This program provides an exemption from the payment of tax on 
electricity charges for manufacturers located in specific regions of 
Maharashtra. In PET Film From India, we determined that this program is 
countervailable because (1) it is specific within the meaning of 
section 771(5A)(D)(iv) of the Act; (2) the tax exemption provided 
through the program constitutes a financial contribution with the 
meaning of section 771(5)(D)(ii) of the Act; and (3) pursuant to 
section 771(5)(E) of the Act, the benefit consists of the amount of the 
tax exempted.
    As adverse facts available for this SOM program, we preliminary 
determine to use a rate of 0.36 percent ad valorem, which is the 
highest company-specific program rate calculated in PET Film From 
India, 67 FR 34905.

Programs Not Previously Examined

    As explained in the Initiation Notice and in the Initiation 
Checklist, this investigation includes several programs that have not 
been examined in prior investigations and administrative reviews. 
Because the GOI and TISCO did not provide the information necessary to 
conduct our investigation of these programs, we are making an adverse 
inference that each program is countervailable. Summaries of 
petitioners' allegations with regard to each program are provided in 
the Initiation Checklist.

A. Programs in the State of Maharashtra

1. Octroi Refund Scheme
    Petitioners alleged that, under the Octroi Refund Scheme, 
industrial establishments that make capital investments in specific 
regions of Maharashtra are entitled to the refund of octroi duty, a tax 
levied by local authorities on goods that enter a town or district, and 
possibly to the refund of other duties. As adverse facts available for 
the State of Maharastra Octoi Refund Scheme, we preliminary determine 
to use a rate of 2.00 percent ad valorem, which is the de minimis rate 
applicable for developing countries.
2. Exemption of Sales and Purchase Taxes for Certain Investments 
Related to Automobiles or Automobile Components
    Petitioners alleged that, under this program, automobile investment 
projects over Rs. 15 billion in Category A districts are eligible to 
receive tax incentives. As adverse facts available for this State of 
Maharastra program, we preliminary determine to use a rate of 2.00 
percent ad valorem, which is the de minimis rate applicable for 
developing countries.

B. Program in the State of Bihar

1. Sales Tax Incentives
    Petitioners argued that the State of Bihar operates its sales tax 
scheme in a manner ``substantially identical'' to the Maharashtra sales 
tax incentive scheme that the Department countervailed in PET Film From 
India. They alleged that, under the Industrial Policy of Bihar 1995, 
the government granted tax incentives to companies that invested in 
``backward areas'' within Bihar. In addition, petitioners pointed out 
that the State of Bihar expands its sales tax scheme by expanding the 
eligibility criteria to include new or existing industrial units 
undertaking expansion, modernization, or diversification through an 
investment of more than Rs. 500 crores (equivalent to Rs. 
5,000,000,000, as Rs. 1 crore = 10,000,000 rupees). They alleged, that, 
under this sales tax scheme, ``new industrial units'' are permitted to 
either ``set off'' or exempt sales taxes paid on

[[Page 40636]]

the purchase of raw materials within the state and either defer or 
exempt sales taxes on the sale of finished goods.
    As adverse facts available for the State of Bihar sales tax 
incentive program, we preliminary determine to use a rate of 2.00 
percent ad valorem, which is the de minimis rate applicable for 
developing countries.

C. Programs in the State of Jharkhand

1. Sales Tax Incentives
    Petitioners alleged that, under this program, ``existing industrial 
units'' as well as ``new industrial units'' are eligible to ``set off'' 
the Jharkhand sales tax paid on purchases of raw materials against the 
amount of sales tax payable to Jharkhand on the sale of finished 
products. As adverse facts available for the State of Jharkhand (SOJ) 
sales tax incentive program, we preliminary determine to use a rate of 
2.00 percent ad valorem, which is the de minimis rate applicable for 
developing countries.
2. Captive Electricity Generative Plant Subsidy
    Petitioners alleged that, under the Jharkhand Industrial Policy 
2001, the SOJ provides a grant to ``new industrial units'' in certain 
industries that invest in a captive electricity generating plant within 
``backward areas'' of the state. As adverse facts available for the SOJ 
program, we preliminary determine to use a rate of 2.00 percent ad 
valorem, which is de minimis rate applicable for developing countries.
3. Interest Subsidy
    Petitioners alleged that, under the Jharkhand Industrial Policy 
2001, the SOJ provides an interest subsidy to eligible ``new industrial 
units'' that invest in ``backward areas'' within the state. Annexures I 
and III of the Jharkhand Industrial Policy 2001 identify ``backward 
areas'' and ineligible industries, respectively. As adverse facts 
available for this SOJ program, we preliminary determine to use a rate 
of 2.00 percent ad valorem, which is de minimis rate applicable for 
developing countries.
4. Stamp Duty and Registration
    Petitioners alleged that, under the Jharkhand Industrial Policy 
2001, the SOJ grants an exemption from the payment of 50 percent of the 
stamp duty and registration fee required for the purpose of registering 
documents with the state relating to the purchase of land and buildings 
for establishing a ``new industrial unit'' within certain ``backward 
areas'' of the state. As adverse facts available for the SOJ program, 
we preliminary determine to use a rate of 2.00 percent ad valorem, 
which is the de minimis rate applicable for developing countries.
5. Pollution Control Equipment Subsidy
    Petitioners alleged that, under the Jharkhand Industrial Policy 
2001, the SOJ provides a capital investment subsidy in the form of a 
grant for installation of pollution control and monitoring equipment to 
eligible new and existing industrial units in ``backward areas'' of the 
state. As adverse facts available for the SOJ program, we preliminary 
determine to use a rate of 2.00 percent ad valorem, which is the de 
minimis rate applicable for developing countries.
6. Mega Units
    Petitioners alleged that, under the Jharkhand Industrial Policy 
2001, the SOJ formulates special tax incentives and tax deferrals for 
new projects with an investment of more than Rs. 500,000,000 (``mega 
units'') on a case-by-case basis. As adverse facts available for this 
SOJ program, we preliminary determine to use a rate of 2.00 percent ad 
valorem, which is the de minimis rate applicable for developing 
countries.
7. Captive Electricity Tax Exemptions
    Petitioners allege that the SOJ seeks to encourage the private 
sector to establish captive power generation plants. Under the 
Jharkhand Industrial Policy 2001, such captive power generation and 
purchase shall be exempted from electricity duty for a period of ten 
years from the date of commercial production. As adverse facts 
available for this SOJ program, we preliminary determine to use a rate 
of 2.00 percent ad valorem, which is the de minimis rate applicable for 
developing countries.

D. Program in the State of Gujarat

1. Sales Tax Incentives
    Petitioners argue that, pursuant to the 1995 Industrial Policy of 
Gujarat, the government granted sales tax incentives to eligible 
investments located in specific areas in Gujarat. Only ``banned 
industries'' and operations in ``banned areas'' were ineligible. 
Petitioners allege that eligible units were entitled to purchase raw 
materials, consumable stores, packing materials and processing 
materials required for production free of charge. They allege that, in 
addition, other available benefits included exemptions or deferment 
from sales tax on the sales of goods, intermediate products by-
products, scrap, and waste as well as exemptions or deferment from 
turnover tax and the Central Sales Tax. Petitioners allege that, with 
the 2000 Industrial Policy, the State of Gujarat extended the 
availability of these sales tax incentives, allowing companies to 
continue benefitting after 2000.
    As adverse facts available for the State of Gujarat's sales tax 
incentive program, we preliminary determine to use a rate of 2.00 
percent ad valorem, which is the de minimis rate applicable for 
developing countries.

Suspension of Liquidation

    In accordance with 703(b) of the Act, we have calculated the 
following countervailing duty rate for all Indian producers/exporters 
of subject merchandise.

------------------------------------------------------------------------
             Producer/Exporter                    Net subsidy rate
------------------------------------------------------------------------
All producers/exporters...................  62.92% ad valorem
------------------------------------------------------------------------

    In accordance with section 703(d) of the Act, we are directing the 
U.S. Bureau of Customs and Border Protection to suspend liquidation of 
all entries of the subject merchandise From India, which are entered or 
withdrawn from warehouse, for consumption on or after the date of the 
publication of this notice in the Federal Register, and to require a 
cash deposit or the posting of a bond for such entries of the 
merchandise in the amount indicated above. This suspension will remain 
in effect until further notice.

ITC Notification

    In accordance with section 703(f) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and nonproprietary information relating to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an administrative protective order, without the written consent 
of the Assistant Secretary for Import Administration.
    In accordance with section 705(b)(2) of the Act, if our final 
determination is affirmative, the ITC will make its final determination 
within 45 days after the Department makes its final determination.

Public Comment

    In accordance with 19 CFR 351.310, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
this preliminary determination. Any requested hearing will be 
tentatively scheduled to be held 57 days from the date of publication 
of the preliminary

[[Page 40637]]

determination at the U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230. Individuals who wish 
to request a hearing must submit a written request within 30 days of 
the publication of this notice in the Federal Register to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230. Parties should confirm by telephone the time, date, and place of 
the hearing 48 hours before the scheduled time. Requests for a public 
hearing should contain: (1) The party's name, address, and telephone 
number; (2) the number of participants; and, (3) to the extent 
practicable, an identification of the arguments to be raised at the 
hearing.
    In addition, six copies of the business proprietary version and six 
copies of the non-proprietary version of the case briefs must be 
submitted to the Assistant Secretary no later than 50 days from the 
date of publication of the preliminary determination. As part of the 
case brief, parties are encouraged to provide a summary of the 
arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited. Six copies of the business proprietary 
version and six copies of the non-proprietary version of the rebuttal 
briefs must be submitted to the Assistant Secretary no later than 5 
days from the date of filing of the case briefs. An interested party 
may make an affirmative oral presentation only on arguments included in 
that party's case or rebuttal briefs. Written arguments should be 
submitted in accordance with 19 CFR 351.309 and will be considered if 
received within the time limits specified above.
    This determination is published pursuant to sections 703(f) and 
777(i) of the Act.

    Dated: June 30, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-17216 Filed 7-7-03; 8:45 am]
BILLING CODE 3510-DS-S