[Federal Register Volume 73, Number 6 (Wednesday, January 9, 2008)]
[Notices]
[Pages 1578-1599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-179]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-533-821]


Certain Hot-Rolled Carbon Steel Flat Products from India: Notice 
of Preliminary Results of Countervailing Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty (CVD) order on certain 
hot-rolled carbon steel flat products from India for the period January 
1, 2006, through December 31, 2006, the period of review (POR). For 
information on the net subsidy rate for each reviewed company, see the 
``Preliminary Results of Review'' section, infra. Interested parties 
are invited to comment on these preliminary results, see the ``Public 
Comment'' section, infra.

EFFECTIVE DATE: January 9, 2008.

FOR FURTHER INFORMATION CONTACT: Kristen Johnson or Robert Copyak, AD/
CVD Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, Room 4014, 14\th\ Street 
and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 
482-4793 or (202) 482-2209, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On December 3, 2001, the Department published in the Federal 
Register the CVD order on certain hot-rolled carbon steel flat products 
from India. See Notice of Amended Final Determination and Notice of 
Countervailing Duty Orders: Certain Hot-Rolled Carbon Steel Flat 
Products from India and Indonesia, 66 FR 60198 (December 3, 2001) 
(Amended Final Determination of HRC Investigation). On December 1, 
2006, the Department published a notice of opportunity to request an 
administrative review of this CVD order. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 71 FR 69543

[[Page 1579]]

(December 1, 2006) (Opportunity to Request Review).\1\
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    \1\ On December 18, 2006, we published a correction to the 
notice of Opportunity to Request Review to correct the POR. See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review; 
Correction, 71 FR 75709 (December 18, 2006).
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    We received timely requests for review from Essar Steel Ltd. 
(Essar) and Ispat Industries Ltd. (Ispat), both Indian producers and 
exporters of subject merchandise on December 28, 2006. On December 29, 
2006, we received a timely request for review from JSW Steel Ltd. 
(JSW)\2\ and Tata Steel Ltd. (Tata), both Indian producers and 
exporters of subject merchandise. On January 3, 2007, we received an 
untimely request for review from petitioner.\3\
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    \2\ JSW was previously known as Jindal Vijayanagar Steel Ltd. 
The company name was changed on June 16, 2005.
    \3\ Petitioner is United States Steel Corporation.
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    On February 2, 2007, the Department initiated an administrative 
review of the CVD order on certain hot-rolled carbon steel flat 
products from India, covering the period January 1, 2006 through 
December 31, 2006. See Initiation of Antidumping and Countervailing 
Duty Administrative Reviews and Requests for Revocation in Part, 72 FR 
5005 (February 2, 2007).
    The Department issued a questionnaire to the Government of India 
(GOI), Essar, Ispat, JSW, and Tata (collectively, the respondents) on 
February 2, 2007. We received a questionnaire response from Essar on 
March 28, 2007, from Ispat on March 29, 2007, from JSW on April 4, 
2007, from Tata on April 16, 2007, and from the GOI on April 23, 2007. 
From August 2007, through November 2007, we issued supplemental 
questionnaires to the respondents regarding programs addressed in the 
initial CVD questionnaire and received supplemental questionnaire 
responses. In the case of JSW, as explained below, it failed to fully 
respond to the Department's November 8, 2007, supplemental 
questionnaire.
    On May 23, 2007, petitioner submitted new subsidy allegations 
against Essar, Ispat, JSW, and Tata. On September 13, 2007, the 
Department initiated an investigation of the new subsidies allegations 
against Ispat.\4\ On September 20, 2007, we issued the new subsidies 
questionnaire to Ispat, the GOI and the state government of 
Maharashtra. On September 27, 2007, the Department initiated an 
investigation of the new subsidies allegations against JSW and Tata, 
respectively,\5\ and issued new subsidies questionnaires to JSW, Tata, 
the GOI, the state government of Karnataka (regarding JSW's new 
subsidies allegations), and the state government of Jharkhand 
(regarding Tata's new subsidies allegations). On October 4, 2007, the 
Department initiated an investigation of the new subsidies allegations 
against Essar\6\ and issued the new subsidies questionnaire to Essar, 
the GOI, and the state governments of Gujarat, Andhra Pradesh, and 
Chhattusgarh on October 5, 2007. From November 1, 2007, through 
November, 13, 2007, we received responses to the new subsidies 
questionnaires from Essar, Ispat, JSW, and Tata. From November 27, 
2007, through December 12, 2007, we received responses to our new 
subsidies supplemental questionnaires from Essar, Ispat, and Tata. As 
explained below, JSW failed to respond to the Department's new 
subsidies supplemental questionnaire.
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    \4\ See Memorandum to Melissa G. Skinner, Director, Office 3, 
through Eric B. Greynolds, Program Manager, from Robert Copyak, Case 
Analyst, regarding New Subsidy Allegations for Ispat Industries 
Limited (February 13, 2007). This public document is available on 
the public file in the Department's Central Records Unit (CRU) 
located in room B-099.
    \5\ See Memorandum to Melissa G. Skinner, Director, Office 3, 
through Eric B. Greynolds, Program Manager, from Kristen Johnson, 
Case Analyst, regarding New Subsidy Allegations for JSW Steel Ltd. 
(September 27, 2007) and Memorandum to Melissa G. Skinner, Director, 
Office 3, through Eric B. Greynolds, Program Manager, from John 
Conniff, Case Analyst, regarding New Subsidy Allegations for Tata 
Steel Ltd. (September 27, 2007). The memoranda are public documents 
available on the public file in the CRU.
    \6\ See Memorandum to Melissa G. Skinner, Director, Office 3, 
through Eric B. Greynolds, Program Manager, from Gayle Longest, Case 
Analyst, regarding New Subsidy Allegations for Essar Steel Ltd. 
(October 4, 2007). This public document is available on the public 
file in the CRU.
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    In the case of the GOI, on November 8, 2007, we received a 
questionnaire response pertaining to subsidies allegedly received by 
Tata. However, as explained below, in spite of receiving multiple 
extensions of the deadline to respond to the Department's new subsidies 
questionnaires, the GOI did not respond to the new subsidies 
questionnaires pertaining to Essar, Ispat, and JSW.
    On August 2, 2007, the Department published in the Federal Register 
an extension of the deadline for the preliminary results of this 
review. See Hot-Rolled Carbon Steel Products from India: Extension of 
Time Limit for Preliminary Results of Countervailing Duty 
Administrative Review, 72 FR 42399 (August 2, 2007).
    In accordance with 19 CFR 351.213(b), this review covers only those 
producers or exporters for which a review was specifically requested. 
The companies subject to this review are Essar, Ispat, JSW, and Tata. 
This review covers 56 programs.

Scope of Order

    The merchandise subject to this order is certain hot-rolled flat-
rolled carbon-quality steel products of a rectangular shape, of a width 
of 0.5 inch or greater, neither clad, plated, nor coated with metal and 
whether or not painted, varnished, or coated with plastics or other 
non-metallic substances, in coils (whether or not in successively 
superimposed layers), regardless of thickness, and in straight lengths, 
of a thickness of less than 4.75 mm and of a width measuring at least 
10 times the thickness. Universal mill plate (i.e., flat-rolled 
products rolled on four faces or in a closed box pass, of a width 
exceeding 150 mm, but not exceeding 1250 mm, and of a thickness of not 
less than 4 mm, not in coils and without patterns in relief) of a 
thickness not less than 4.0 mm is not included within the scope of this 
order.
    Specifically included in the scope of this order are vacuum-
degassed, fully stabilized (commonly referred to as interstitial-free 
(IF)) steels, high-strength low-alloy (HSLA) steels, and the substrate 
for motor lamination steels. IF steels are recognized as low-carbon 
steels with micro-alloying levels of elements such as titanium or 
niobium (also commonly referred to as columbium), or both, added to 
stabilize carbon and nitrogen elements. HSLA steels are recognized as 
steels with micro-alloying levels of elements such as chromium, copper, 
niobium, vanadium, and molybdenum. The substrate for motor lamination 
steels contains micro-alloying levels of elements such as silicon and 
aluminum.
    Steel products included in the scope of this order, regardless of 
definitions in the Harmonized Tariff Schedule of the United States 
(HTS), are products in which: I) iron predominates, by weight, over 
each of the other contained elements; ii) the carbon content is 2 
percent or less, by weight; and iii) none of the elements listed below 
exceeds the quantity, by weight, respectively indicated:
    1.80 percent of manganese, or
    2.25 percent of silicon, or
    1.00 percent of copper, or
    0.50 percent of aluminum, or
    1.25 percent of chromium, or
    0.30 percent of cobalt, or
    0.40 percent of lead, or
    1.25 percent of nickel, or
    0.30 percent of tungsten, or
    0.10 percent of molybdenum, or

[[Page 1580]]

    0.10 percent of niobium, or
    0.15 percent of vanadium, or
    0.15 percent of zirconium.
    All products that meet the physical and chemical description 
provided above are within the scope of this order unless otherwise 
excluded. The following products, by way of example, are outside or 
specifically excluded from the scope of this order:
     Alloy hot-rolled steel products in which at least one of 
the chemical elements exceeds those listed above (including, e.g., ASTM 
specifications A543, A387, A514, A517, A506).
     SAE/AISI grades of series 2300 and higher.
     Ball bearings steels, as defined in the HTS.
     Tool steels, as defined in the HTS.
     Silico-manganese (as defined in the HTS) or silicon 
electrical steel with a silicon level exceeding 2.25 percent.
     ASTM specifications A710 and A736.
     USS Abrasion-resistant steels (USS AR 400, USS AR 500).
     All products (proprietary or otherwise) based on an alloy 
ASTM specification (sample specifications: ASTM A506, A507).
     Non-rectangular shapes, not in coils, which are the result 
of having been processed by cutting or stamping and which have assumed 
the character of articles or products classified outside chapter 72 of 
the HTS.
    The merchandise subject to this order is currently classifiable in 
the HTS at subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled flat-rolled 
carbon-quality steel covered by this order, including: vacuum-degassed 
fully stabilized; high-strength low-alloy; and the substrate for motor 
lamination steel may also enter under the following tariff numbers: 
7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 
7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise 
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTS 
subheadings are provided for convenience and customs purposes, the 
Department's written description of the merchandise subject to this 
order is dispositive.

Adverse Facts Available

I. The GOI

    As discussed above, the Department initiated investigations of new 
subsidies allegedly provided to Essar, Ispat, JSW, and Tata by the GOI 
and Indian state governments. On September 20, 2007, the Department 
issued a questionnaire to the GOI pertaining to new subsidies allegedly 
received by Ispat. On September 27, 2007, the Department issued new 
subsidies questionnaires to the GOI pertaining to new subsidies 
allegedly received by JSW and Tata, respectively. On October 5, 2007, 
the Department issued a questionnaire to the GOI pertaining to new 
subsidies allegedly received by Essar.
    At the request of the government, the Department extended the GOI's 
deadline to respond to the new subsidies questionnaires on multiple 
occasions. Specifically, on October 11, 2007, the Department granted 
the GOI an additional two weeks to respond to the new subsidies 
questionnaire covering Ispat. On October 12, 2007, the Department 
provided the GOI a two-week extension to respond to the new subsidies 
questionnaires covering Essar, JSW, and Tata. On October 24, 2007, the 
Department granted the GOI a seven-day extension to respond to the new 
subsidies questionnaire covering Ispat. On November 1, 2007, the 
Department granted the GOI a seven-day extension to respond to all four 
new subsidies questionnaires.
    On November 8, 2007, the GOI submitted a questionnaire response 
pertaining to the new subsidies allegedly received by Tata. However, 
with respect to Essar, Ispat, and JSW, the GOI stated that ``since the 
information sought from the GOI is on the same lines as that sought 
from the respondent companies, the GOI has nothing further to add.'' In 
a November 14, 2007, letter to the GOI, the Department attached copies 
of the original new subsidies questionnaires pertaining to Essar, 
Ispat, and JSW and explained that the questions addressed to the GOI 
were distinct from those contained in the new subsidies questionnaires 
issued to the respective companies. In the letter the Department 
further explained that the GOI's failure to respond to the new 
subsidies questionnaires could result in the Department applying 
adverse inferences within the meaning of section 776(b) of the Tariff 
Act of 1930, as amended (the Act). The Department provided the GOI an 
additional 12 days to submit its questionnaire responses.
    On November 26, 2007, the GOI requested a two-day extension to 
respond the new subsidies questionnaires covering Essar, Ispat, and 
JSW. In an amended submission, the GOI requested an additional five-day 
extension. On November 28, 2007, the Department rejected the GOI's 
extension requests explaining that the GOI's proposed extension would 
not provide the Department with sufficient time to analyze and 
incorporate information in the questionnaire responses prior to the 
preliminary results of review.  See the Department's November 28, 2007, 
letter to the GOI, which in on the public record in the CRU.
    Sections 776(a)(1) and (2) of the Act provide that the Department 
shall apply ``facts otherwise available'' if, inter alia, necessary 
information is not on the record or an interested party or any other 
person: (A) withholds information that has been requested; (B) fails to 
provide information within the deadlines established, or in the form 
and manner requested by the Department, subject to subsections (c)(1) 
and (e) of section 782 of the Act; (copyright)) significantly impedes a 
proceeding; or (D) provides information that cannot be verified as 
provided by section 782(i) of the Act.
    Where the Department determines that a response to a request for 
information does not comply with the request, section 782(d) of the Act 
provides that the Department will so inform the party submitting the 
response and will, to the extent practicable, provide that party the 
opportunity to remedy or explain the deficiency. If the party fails to 
remedy the deficiency within the applicable time limits and subject to 
section 782(e) of the Act, the Department may disregard all or part of 
the original and subsequent responses, as appropriate. Section 782(e) 
of the Act provides that the Department ``shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all applicable requirements 
established by the administering authority'' if the information is 
timely, can be verified, is not so incomplete that it cannot be used,

[[Page 1581]]

and if the interested party acted to the best of its ability in 
providing the information. Where all of these conditions are met, the 
statute requires the Department to use the information if it can do so 
without undue difficulties.
    Because the GOI failed to provide the requested information by the 
established deadlines, the Department does not have the necessary 
information on the record to determine whether the new subsidies 
allegedly received by Essar, Ispat, and JSW constitute financial 
contributions and are specific within sections 771(D) and 771(5A) of 
the Act, respectively. Therefore, the Department must base its 
determination on the facts otherwise available in accordance with 
section 776(a)(2)(B) of the Act.
    Section 776(b) of the Act further provides that the Department may 
use an adverse inference in applying the facts otherwise available when 
a party has failed to cooperate by not acting to the best of its 
ability to comply with a request for information. Section 776(b) of the 
Act also authorizes the Department to use as adverse facts available 
(AFA) information derived from the petition, the final determination, a 
previous administrative review, or other information placed on the 
record. For the reasons discussed below, we determine that, in 
accordance with sections 776(a)(2)(B) and 776(b) of the Act, the use of 
AFA is appropriate for the preliminary results with respect to newly 
alleged subsidy programs used by Essar, Ispat, and JSW.\7\
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    \7\ As explained above, the GOI responded to the questionnaire 
pertaining to new subsidy programs allegedly received by Tata.
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    As noted, the Department extended the GOI's deadline to respond to 
the new subsidies questionnaires on multiple occasions. However, with 
the exception of the questionnaire pertaining to Tata, the GOI failed 
to submit responses to the new subsidies questionnaires pertaining to 
Essar, Ispat, and JSW. Therefore, consistent with section 776(a)(2)(B) 
of the Act, we find that the GOI did not act to the best of its ability 
and, therefore, we are employing adverse inferences in selecting from 
among the facts otherwise available. Accordingly, pursuant to section 
776(b) of the Act, we find that all newly alleged subsidy programs used 
by Essar, Ispat, and JSW constitute financial contributions and are 
specific pursuant to sections 771(5)(D) and 771(5A) of the Act, 
respectively.\8\ Thus, in this segment of the proceeding, we 
preliminarily determine that any newly alleged programs used by Essar, 
Ispat, and JSW are countervailable to the extent that the programs 
conferred a benefit during the POR.\9\ The Department's decision to 
rely on adverse inferences when lacking a response from a foreign 
government is in accordance with its practice. See, e.g., Notice of 
Preliminary Results of Countervailing Duty Administrative Review: 
Certain Cut-to-Length Carbon-Quality Steel Plate from the Republic of 
Korea, 71 FR 11397, 11399 (March 7, 2006) (unchanged in the Notice of 
Final Results of Countervailing Duty Administrative Review: Certain 
Cut-to-Length Carbon-Quality Steel Plate from the Republic of Korea, 71 
FR 38861 (July 10, 2006), in which the Department relied on adverse 
inferences in determining that the Government of Korea directed credit 
to the steel industry in a manner that constituted a financial 
contribution and was specific to the steel industry within the meaning 
of the sections 771(5)(D)(i) and 771(5A)(D)(iii) of the Act, 
respectively. For a discussion of the Department's methodology of 
quantifying the AFA rate for JSW, see section ``II. JSW'' below. For 
the list of programs used by JSW to which we have assigned AFA rates, 
see section ``C. State Government of Karnataka Programs'' below.
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    \8\ Because the programs at issue are new and because the GOI 
failed to provide any information on how the alleged programs 
operate, in applying adverse inferences, we are unable to reference 
any sub-paragraphs under section 771(5)(D) and 771(5A) of the Act.
    \9\ In these preliminary results, we find that JSW used newly 
alleged programs. However, as noted below, based on information 
provided, we preliminarily determine that Essar and Ispat did not 
use any of the newly alleged programs. We invite parties to comment 
for the final results on whether, in light of the incomplete 
responses by the GOI with respect to these newly alleged programs, 
it would be more appropriate to use facts available in determining 
to what extent Essar and Ispat may have benefitted from these newly 
alleged programs.
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II. JSW

    As explained above, due to the GOI's failure to submit a timely 
response, we find that all newly alleged subsidy programs used by JSW 
constitute a financial contribution and are specific pursuant to 
sections 771(5)(D) and 771(5A) of the Act, respectively. In its 
November 1, 2007, response to the Department's new subsidies 
questionnaire, JSW indicated that it received assistance under the 
State Government of Karnataka's (SGOK) ``New Industrial Policy and 
Package of Incentives and Concessions of 1993.'' See JSW's November 1, 
2007, Questionnaire Response to New Subsidies Allegations at 6-7 and 
Annexure A. However, in its response, JSW failed to provide complete 
answers with respect to the following newly alleged programs: ``GOI's 
Granting of Captive Mining Rights for Iron Ore,'' ``SGOK's New 
Industrial Policy and Package of Incentives and Concessions of 1993'' 
and ``Other SGOK Subsidies,'' which address subsidies allegedly 
received by Vijayanagar Minerals Private Limited (VMPL). VMPL is a 
joint venture between JSW and Mysore Minerals Limited (MML), a state-
owned company located in Karnataka. In particular, JSW and VMPL failed 
to quantify the extent to which they used the new subsidy programs 
under examination.
    On November 8, 2007, the Department issued a supplemental 
questionnaire to JSW and VMPL in which it sought to clarify the 
deficiencies. Subsequent to the issuance of the supplemental 
questionnaire, Department officials spoke with a JSW official to 
discuss the information requested in the supplemental questionnaire and 
answer JSW's questions regarding the subsidy programs under review. See 
Memorandum to the File from Kristen Johnson, Trade Analyst, through 
Eric B. Greynolds, Program Manager, concerning Telephone Call to JSW 
(November 14, 2007).\10\ The Department later reminded JSW that if the 
company needed additional time to respond to the supplemental 
questionnaire, which had a response due date of November 21, 2007, then 
JSW would have to file a letter requesting an extension of time to 
submit its response to the November 8, 2007, supplemental 
questionnaire. See Memorandum to the File from Kristen Johnson, Trade 
Analyst, through Eric B. Greynolds, Program Manager, concerning Emails 
Sent to JSW (November 21, 2007).\11\ JSW, however, did not submit a 
questionnaire response or letter requesting an extension to respond to 
the supplemental questionnaire.
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    \10\ This public document is available on the public file in the 
CRU.
    \11\ This public document is available on the public file in the 
CRU.
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    In addition, JSW failed to completely respond to supplemental 
questions concerning the ``Sale of High-Grade Iron Ore for Less Than 
Adequate Remuneration'' program that were included in the Department's 
initial questionnaire. See JSW's October 22, 2007, Supplemental 
Questionnaire Response at 22 and JSW's November 19, 2007, Supplemental 
Questionnaire Response at 15-16 and Table A.
    Because JSW failed to provide the information requested in the 
Department's supplemental questionnaires by the established

[[Page 1582]]

deadlines, the Department does not have the necessary information on 
the record to determine the extent to which JSW benefitted from certain 
programs within the meaning of section 771(5)(E) of the Act. Therefore, 
the Department must base its determination on facts otherwise available 
in accordance with section 776(a)(2)(B) of the Act. Furthermore, we 
preliminarily determine that by failing to respond to the Department's 
supplemental questionnaires by the established deadlines, JSW has 
failed to cooperate to the best of its ability and, thus, pursuant to 
section section 776(b) of the Act, the use of adverse inferences in 
applying the facts otherwise available is warranted.
    The Department's practice when selecting an adverse margin from 
among the possible sources of information is to ensure that the margin 
is sufficiently adverse ``as to effectuate the purpose of the facts 
available role to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' See Notice of 
Final Determination of Sales at Less than Fair Value: Static Random 
Access Memory Semiconductors From Taiwan, 63 FR 8909, 8932 (February 
23, 1998). The Department's practice also ensures ``that the party does 
not obtain a more favorable result by failing to cooperate than if it 
had cooperated fully.'' See Statement of Administrative Action (SAA) at 
870. In choosing the appropriate balance between providing a respondent 
with an incentive to respond accurately and imposing a rate that is 
reasonably related to the respondent's prior commercial activity, 
selecting the highest prior margin ``reflects a common sense inference 
that the highest prior margin is the most probative evidence of current 
margins, because, if it were not so, the importer, knowing of the rule, 
would have produced current information showing the margin to be 
less.'' See Rhone Poulenc, Inc. v. United States, 899 F. 2d 1185, 1190 
(Fed. Cir. 1990).
    In deciding which facts to use when calculating the AFA rate, 
section 776(b) of the Act and 19 CFR 351.308(c)(1) authorize the 
Department to rely on information derived from (1) the petition, (2) a 
final determination in the investigation, (3) any previous review or 
determination, or (4) any information placed on the record. In its May 
23, 2007, new subsidies allegation submission, petitioner did not 
provide estimated net subsidy rates regarding the new subsidies 
allegedly received by JSW.\12\ Further, the additional subsidy programs 
pertaining to JSW were alleged for the first time in this 
administrative review and, thus, no information exists concerning these 
programs in prior segments of the proceeding.
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    \12\ This pubic document is available on the public file in the 
CRU.
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    Therefore, for each instance in which JSW failed to provide the 
information necessary for the Department to determine the extent to 
which JSW used a newly alleged subsidy program, we have, in accordance 
with section 776(b)(4) of the Act, relied upon the highest calculated 
net subsidy rate established for an industry-wide program in this 
proceeding. Specifically, we have utilized a net subsidy rate of 16.63 
percent ad valorem, which corresponds to the net subsidy rate that 
Ispat received under the Export Promotion Capital Goods Scheme in the 
underlying investigation. See Final Affirmative Countervailing Duty 
Determination: Certain Hot- Rolled Carbon Steel Flat Products From 
India, 66 FR 49635 (September 28, 2001) (Final Determination of HRC 
Investigation), and accompanying Issues and Decision Memorandum (Final 
Determination of HRC Investigation Decision Memorandum) at ``Export 
Promotion of Capital Goods Scheme.'' This approach is consistent with 
the Department's practice. See, e.g., Certain In-shell Roasted 
Pistachios from the Islamic Republic of Iran: Final Results of 
Countervailing Duty Administrative Review, 71 FR 66165 (November 13, 
2006), and accompanying Issues and Decision Memorandum at ``Duty 
Refunds on Imported Raw or Intermediate Materials Used in the 
Production of Export Goods,'' which states:
    This program was alleged for the first time in the Pistachios 
New Shipper Reviews, and thus was not among the programs addressed 
in Roasted Pistachios. However, lacking any information from Nima 
and the Government of Iran on the record of the instant review, we 
find that the net subsidy rate of 6.65 percent, the highest rate 
established for an industry-wide program in Roasted Pistachios, is 
the only available information on the record and, therefore, as 
adverse facts available, is the appropriate rate to apply to this 
program. Accordingly, we find that the net subsidy rate for this 
program is 6.65 percent ad valorem.
    For additional information concerning the Department's treatment of 
these programs under AFA and for a list of programs used by JSW to 
which we have assigned AFA rates, see section ``C. State Government of 
Karnataka Programs'' below.
    Further, section 776(c) of the Act provides that, when the 
Department relies on secondary information rather than on information 
obtained in the course of an investigation or review, it shall, to the 
extent practicable, corroborate that information from independent 
sources that are reasonably at its disposal. Secondary information is 
defined as ``information derived from the petition that gave rise to 
the investigation or review, the final determination concerning the 
subject merchandise, or any previous review under section 751 
concerning the subject merchandise.'' See SAA at 870. Corroborate means 
that the Department will satisfy itself that the secondary information 
to be used has probative value. Id. To corroborate secondary 
information, the Department will, to the extent practicable, examine 
the reliability and relevance of the information to be used. The SAA 
emphasizes, however, that the Department need not prove that the 
selected facts available are the best alternative information. Id. at 
869.
    Thus, in those instances in which it determines to apply adverse 
facts available, the Department, in order to satisfy itself that such 
information has probative value, will examine, to the extent 
practicable, the reliability and relevance of the information used. 
With regard to the reliability aspect of corroboration, 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 typically are no independent sources for data on company-specific 
benefits resulting from countervailable subsidy programs. The only 
source for such information normally is administrative determinations. 
In the instant case, no evidence has been presented or obtained which 
contradicts the reliability of the evidence relied upon in previous 
segments of this proceeding.
    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. Where circumstances indicate that the information is not 
appropriate as adverse facts available, the Department will not use it. 
See Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty 
Administrative Review, 61 FR 6812 (February 22, 1996). In the instant 
case, no evidence has been presented or obtained which contradicts the 
relevance of the benefit data relied upon in previous segments of this 
proceeding. Thus, in the instant case, the

[[Page 1583]]

Department finds that the information used has been corroborated to the 
extent practicable.
    JSW also reported using a program that was previously found to be 
countervailable (i.e., ``Sale of High-Grade Iron Ore for Less Than 
Adequate Remuneration''), about which it failed to provided a complete 
response. As discussed above, we find that, by failing to provide a 
complete response concerning the program, JSW has failed to act to the 
best of its ability. Therefore, under section 776(b) of the Act, we 
have applied adverse inferences using, to the extent possible, the 
limited information provided by JSW along with other information on the 
record of this segment of the proceeding when calculating the benefit. 
For further information concerning the Department's calculation of the 
benefit received by JSW under the program, see the program description 
below. For those programs for which the GOI and JSW have provided 
complete responses, we are basing our determination of the 
countervailability of each program based on the information 
provided.\13\ We invite parties to comment for the final results of 
review on whether, in light of the incomplete responses by JSW and the 
GOI for so many programs, it would, be more appropriate to use adverse 
inferences under section 776(b) of the Act in determining the 
countervailable benefits for all of JSW's programs.
---------------------------------------------------------------------------

    \13\ We invite parties to comment for the final results of 
review on whether, in light of the incomplete responses by JSW and 
the GOI for so many programs, it would be more appropriate to use 
adverse inferences under section 776(b) of the Act in determining 
the countervailable benefits for all of JSW's programs.
---------------------------------------------------------------------------

Subsidies Valuation Information

I. Benchmarks for Loans and Discount Rates

    Pursuant to 19 CFR 351.524(d)(3)(i), the Department will use, when 
available, the company-specific cost of long-term, fixed-rate loans 
(excluding loans deemed to be countervailable subsidies) as a discount 
rate for allocating non-recurring benefits over time. Similarly, 
pursuant to 19 CFR 351.505(a), the Department will use the actual cost 
of comparable borrowing by a company as a loan benchmark, when 
available. According to 19 CFR 351.505(a)(2), a comparable commercial 
loan is defined as one that, when compared to the loan being examined, 
has similarities in the structure of the loan (e.g., fixed interest 
rate vs. variable interest rate), the maturity of the loan (e.g., 
short-term vs. long-term), and the currency in which the loan is 
denominated.
    For programs requiring the application of a benchmark interest 
rate, 19 CFR 351.505(a)(2)(ii) states a preference for using an 
interest rate that the company could have obtained on a comparable loan 
in the commercial market. Also, 19 CFR 351.505(a)(3)(i) stipulates that 
when selecting a comparable commercial loan that the recipient ``could 
actually obtain on the market,'' the Department will normally rely on 
actual short-term and long-term loans obtained by the firm. However, 
when there are no comparable commercial loans, the Department may use a 
national average interest rate, pursuant to 19 CFR 351.505(a)(3)(ii). 
In addition, 19 CFR 351.505(a)(2)(ii) states that the Department will 
not consider a loan provided by a government-owned bank for purposes of 
calculating benchmark rates.
    For programs requiring a rupee-denominated discount rate or the 
application or a rupee-denominated long-term fixed-rate benchmark, we 
used, where available, company-specific, weighted-average interest 
rates on comparable commercial long-term, rupee-denominated loans. Some 
respondents, however, did not have comparable commercial long-term, 
rupee-denominated loans for all the required years. Therefore, for 
those years for which we did not have company-specific information, we 
relied on comparable long-term, rupee-denominated benchmark interest 
rates from the immediately preceding year as directed by 19 CFR 
351.505(a)(2)(iii). When there were no comparable long-term, rupee-
denominated loans from commercial banks during either the year under 
consideration or the preceding year, pursuant to 19 CFR 
351.505(a)(3)(ii), we used a national average interest rate as the 
benchmark. Specifically, we used India's prime lending rate (PLR), as 
published by the Reserve Bank of India (RBI), as our long-term 
benchmark interest rate. See Memorandum to the File from Kristen 
Johnson, Trade Analyst, regarding India's Prime Lending Rate (November 
28, 2007).\14\ The use of the PLR is consistent with the Department's 
practice in prior Indian proceedings. See, e.g., Final Results of 
Countervailing Duty Administrative Review: Certain Hot-Rolled Carbon 
Steel Flat Products from India, 69 FR 26549 (May 13, 2004) (Final 
Results of First HRC Review), and accompanying Issues and Decision 
Memorandum (Final Results of First HRC Review Decision Memorandum) at 
``Benchmarks for Loans and Discount Rate.''
---------------------------------------------------------------------------

    \14\ This public document is available on the public file in the 
CRU.
---------------------------------------------------------------------------

    For those programs requiring a foreign currency-denominated 
discount rate or application of a foreign currency-denominated long-
term fixed-rate benchmark, we used, where available, company-specific, 
weighted-average interest rates of comparable commercial long-term 
loans, denominated in the same currency. Where no such benchmark 
instruments were available, consistent with 19 CFR 351.505(a)(3)(ii), 
we used currency-specific lending rates from private creditors as 
reported by the International Monetary Fund's (IMF) publication 
International Financial Statistics. The use of the IMF's publication 
for benchmark rate information is consistent with the Department's 
practice in prior Indian cases. See Final Determination of HRC 
Investigation Decision Memorandum at ``Benchmarks for Loans and 
Discount Rate,'' see also Notice of Final Affirmative Countervailing 
Duty Determination and Final Negative Critical Circumstances 
Determination: Certain Lined Paper Products from India, 71 FR 45034 
(August 8, 2006) (Final Determination of Lined Paper Investigation), 
and accompanying Issues and Decision Memorandum (Final Determination of 
Lined Paper Investigation Decision Memorandum) at ``Benchmarks for 
Loans and Discount Rate.''
    For variable-rate rupee-denominated or foreign currency-denominated 
loans outstanding during the POR, our preference is to use the interest 
rates of variable-rate lending instruments issued during the year in 
which the government loans were issued, pursuant to 19 CFR 
351.505(a)(5)(i). Where such benchmark instruments were unavailable, we 
used interest rates from loans issued during the POR as our benchmark, 
as such rates better reflect a variable interest rate that would be in 
effect during the review period. In one instance, company-specific 
variable-rate Libor information was not available. We, therefore, 
sourced Libor benchmark data from the British Banker's Association. See 
Memorandum to the File from Kristen Johnson, Trade Analyst, regarding 
Libor Rates (November 28, 2007).\15\
---------------------------------------------------------------------------

    \15\ This public document is available on the public file in the 
CRU.
---------------------------------------------------------------------------

    Pursuant to 19 CFR 351.505(a)(2)(iv), if a program under review is 
a government-provided, short-term loan, the preference is to use an 
annual average of the interest rates on comparable commercial loans 
during

[[Page 1584]]

the year in which the government-provided loan was taken out, weighted 
by the principal amount of each loan. For this review, we required both 
US dollar-denominated and rupee-denominated short-term loan benchmark 
rates to determine benefits received under the Pre-Shipment Export 
Financing and Post-Shipment Export Financing programs. Absent a 
company-specific, commercial interest rate denominated in rupees to 
calculate the benefit, we sourced a rupee-denominated short-term 
interest rate for India as reported in the IMF's International 
Financial Statistics. Where we did not have comparable, company-
specific short-term loans denominated in US dollars, we used the 
dollar-denominated short-term interest rate for the United States as 
reported in International Financial Statistics. See e.g., the 
``Benchmarks for Loans and Discount Rate'' section of the Final 
Determination of Lined Paper Investigation Decision Memorandum.

II. Use of Uncreditworthy Benchmarks for Essar

    In the administrative review covering the period April 20, 2001, 
through December 31, 2002, we found Essar to be uncreditworthy during 
2001 and 2002. See Final Results of First HRC Review. As no new 
evidence has been provided to the Department with respect to Essar's 
uncreditworthiness during 2001 and 2002, we will continue to apply the 
uncreditworthy benchmark methodology for those programs requiring a 
long-term benchmark for 2001 and 2002. For our long-term interest 
rates, we used India's PLRs and converted those rates into benchmark 
interest rates for Essar using the formula set forth in 19 CFR 
351.505(a)(3)(iii).

III. Allocation Period

    Under 19 CFR 351.524(d)(2)(i), we presume the allocation period for 
non-recurring subsidies to be the average useful life (AUL) of 
renewable physical assets for the industry concerned, as listed in the 
Internal Revenue Service's 1977 Class Life Asset Depreciation Range 
System (IRS tables), as updated by the U.S. Department of the Treasury. 
This presumption will apply unless a party claims and establishes that 
the IRS tables do not reasonably reflect the AUL of the renewable 
physical assets for the company or industry under review, and the party 
can establish that the difference between the company-specific or 
country-wide AUL for the industry under review is significant, pursuant 
to 19 CFR 351.524(d)(2)(ii). For assets used to manufacture products 
such as hot-rolled carbon steel flat products, the IRS tables prescribe 
an AUL of 15 years.
    In their questionnaire responses, the respondents did not rebut the 
regulatory presumption of a 15-year AUL. We, therefore, used a 15-year 
AUL to allocate any non-recurring subsidies for purposes of these 
preliminary results.
    Further, for non-recurring subsidies, we have applied the ``0.5 
percent test'' described in 19 CFR 351.524(b)(2). Under this test, we 
compare the amount of subsidies approved under a given program in a 
particular year to sales (total sales or total export sales, as 
appropriate) for the same year. If the amount of subsidies is less than 
0.5 percent of the relevant sales, then the benefits are allocated to 
the year of receipt rather than allocated over the AUL period.
    In the case of Tata, for certain years we lacked export sales data 
needed to conduct the ``0.5 percent test'' corresponding to non-
recurring subsidies Tata received prior to the POR. Therefore, for 
purposes of these preliminary results, we derived the export sales 
denominators utilized in the ``0.5 percent test'' using information 
provided by Tata in its questionnaire responses as well as information 
contained in Tata's annual reports, which are publicly available on the 
internet and placed on the record of this segment of the 
proceeding.\16\ Specifically, we calculated the ratio of Tata's export 
sales to total sales for the POR. We then multiplied this ratio by 
Tata's total sales in prior years, as indicated in its annual reports. 
For further information, see Tata's preliminary results calculation 
memorandum.
---------------------------------------------------------------------------

    \16\ Information from Tata's annual reports is included in 
Tata's preliminary results calculation memorandum.
---------------------------------------------------------------------------

Analysis Of Programs

I. Programs Preliminarily Determined To Be Countervailable

A. GOI Programs

1. Pre- and Post-Shipment Export Financing

    The RBI provides short-term pre-shipment export financing, or 
``packing credits,'' to exporters through commercial banks. Upon 
presentation of a confirmed export order or letter of credit to a bank, 
companies may receive pre-shipment loans for working capital purposes. 
Exporters may also establish pre-shipment credit lines upon which they 
may draw as needed. Credit line limits are established by commercial 
banks based upon a company's creditworthiness and past export 
performance, and may be denominated either in Indian rupees or in 
foreign currency. Commercial banks extending export credit to Indian 
companies must, by law, charge interest on this credit at rates capped 
by the RBI. For post-shipment export financing, exporters are eligible 
to receive post-shipment short-term credit in the form of discounted 
trade bills or advances by commercial banks at preferential interest 
rates to finance the period between the date of shipment of exported 
merchandise and payment from export customers (transit period).
    The Department has previously determined that these export 
financing programs are countervailable to the extent that the interest 
rates are capped by the GOI and are lower than the rates exporters 
would have paid on comparable commercial loans. See, e.g., Polyethylene 
Terephthalate Film, Sheet, and Strip from India: Final Results of 
Countervailing Duty Administrative Review, 72 FR 6530 (February 12, 
2007) (Final Results of 3\rd\ PET Film Review), and accompanying Issues 
and Decision Memorandum (Final Results of 3\rd\ PET Film Review 
Decision Memorandum) at ``Pre-Shipment and Post-Shipment Export 
Financing.'' 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 and that the 
interest savings under this program conferred a benefit pursuant to 
section 771(5)(E)(ii) of the Act. The Department also found this 
program, which is contingent upon exports, to be specific within the 
meaning of section 771(5A)(B) of the Act. No new information or 
evidence of changed circumstances has been presented in this review to 
warrant a reconsideration of the Department's finding.
    Essar and Ispat reported rupee-denominated, pre-shipment loans 
outstanding during the POR. Essar reported U.S. dollar-denominated, 
pre-shipment export loans outstanding during the POR. Tata and Ispat 
reported U.S. dollar-denominated, post-shipment loans outstanding 
during the POR. However, Ispat indicated in its questionnaire response 
that it paid no interest on its post-shipment loan during the POR. 
Therefore, for purposes of these preliminary results, we have not 
calculated a benefit for Ispat's post-shipment loan, as no interest was 
due during the POR.
    To calculate the benefit conferred by the pre-shipment and post-
shipment loan programs, we compared the actual interest paid on the 
loans with the amount of interest that would have been

[[Page 1585]]

paid at the benchmark interest rates. We used a rupee- or US dollar-
denominated benchmark, as appropriate (see ``Subsidies Valuation 
Information'' section, supra). Where the benchmark interest exceeds the 
actual interest paid, the difference constitutes the benefit. For pre-
shipment loans, we calculated the company-specific program rates by 
dividing the benefit received by the company during the POR by the 
company's total exports during the POR.
    For pre-shipment loans, we calculated the net subsidy rate by 
dividing the benefit by the participating company's total exports, 
consistent with the Department's practice. See, e.g., Final 
Determination of Lined Paper Investigation Decision Memorandum at 
``Pre- and Post-Shipment Export Financing.'' Because post-shipment 
loans are granted for particular shipments, our practice is to treat 
them as tied to particular markets, in accordance with 19 CFR 
351.525(b)(2). Id. Therefore, to calculate each company's subsidy rate 
for post-shipment financing, we divided the benefit received by the 
company during the POR by the company's exports of subject merchandise 
to the United States during the POR.
    We preliminarily determine the net countervailable subsidy rate 
under the pre-shipment export financing program to be 5.00 percent ad 
valorem for Essar and 0.03 percent ad valorem for Ispat. We 
preliminarily determine that no benefit was provided to Tata under the 
post-shipment export financing program during the POR.

2. 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 a reduced 
customs duty, subject to an export obligation equal to eight times the 
duty saved to be fulfilled over a period of eight years (12 years where 
the CIF value is Rs. 100 Crore\17\) from the date the license was 
issued. 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.
---------------------------------------------------------------------------

    \17\ A crore is equal to 10,000,000 rupees.
---------------------------------------------------------------------------

    The Department has previously determined that the import duty 
reductions provided under the EPCGS constitute a countervailable export 
subsidy. See, e.g., Final Results of 3\rd\ PET Film Review Decision 
Memorandum at ``Export Promotion Capital Goods Scheme;'' see also Final 
Determination of Lined Paper Investigation Decision Memorandum at 
``Export Promotion Capital Goods Scheme.'' Specifically, the Department 
has found that under the EPCGS program, the GOI provides a financial 
contribution under section 771(5)(D)(ii) of Act, in the form of revenue 
foregone that otherwise would be due. The tax savings confer a benefit, 
as defined by section 771(5)(E) of the Act. The Department also found 
this program to be specific under section 771(5A)(B) of the Act because 
it is contingent upon export performance. No new information or 
evidence of changed circumstances has been provided with respect to 
this program. Therefore, we continue to find that import duty 
reductions provided under the EPCGS are countervailable export 
subsidies.
    Essar, Ispat, JSW and Tata reported that they received import duty 
reductions under the EPCGS program. For these preliminary results, we 
have determined the benefit for each respondent in accordance with our 
findings and treatment of this program in other Indian CVD proceedings. 
Id. Under the Department's approach, there are two types of benefits 
under the EPCGS program. The first benefit is the amount of unpaid 
duties that would have to be paid to the GOI if the export requirements 
are not met. The repayment of this liability is contingent on 
subsequent events, and in such instances, it is the Department's 
practice to treat any balance on an unpaid liability as an interest-
free loan. See 19 CFR 351.505(d)(1).
    For those EPCGS licenses for which JSW, Essar, Tata, and Ispat have 
not yet met the export obligations specified in the licenses by the end 
of the POR, we preliminarily find that the companies had outstanding 
contingent liabilities during the POR. We further determine that the 
amount of the contingent liability to be treated as an interest-free 
loan is the amount of the import duty reduction or exemption for those 
EPCGS licenses for which JSW, Essar, Tata, and Ispat applied but, as of 
the end of the POR, have not received a waiver of their obligations to 
repay the duties from the GOI.
    Accordingly, for those unpaid duties for which JSW, Essar, Tata, 
and Ispat have yet to fulfill their export obligations, we 
preliminarily find the benefit to be the interest that they would have 
paid during the POR had they borrowed the full amount of the duty 
reduction at the time of import. Pursuant to 19 CFR 351.505(d)(1), we 
used a long-term interest rate as our benchmark to calculate the 
benefit of a contingent liability interest-free loan because the event 
upon which repayment of the duties depends (i.e., the date of 
expiration of the time period for the companies to fulfill their export 
commitments) occurs at a point in time more than one year after the 
date the capital goods were imported. Specifically, we used the long-
term benchmark interest rates as described in the ``Subsidies 
Valuation'' section, supra. The rate used corresponds to the year in 
which the companies imported the items under the program.
    Further, consistent with our policy, absent acknowledgment in the 
form of an official letter from the GOI that the liability has been 
eliminated, we treat benefits from these licenses as contingent 
liabilities. See e.g., Final Results of 3\rd\ PET Film Review Decision 
Memorandum ``Export Promotion Capital Goods Scheme;'' see also Final 
Determination of Lined Paper Investigation Decision Memorandum at 
``Export Promotion Capital Goods Scheme.''
    The second benefit is the waiver of duty on imports of capital 
equipment covered by those EPCGS licenses for which export requirements 
have been met. For certain licenses, JSW, Essar, Tata, and Ispat 
reported that they had completed their export obligation under the 
EPCGS program, thereby eliminating the outstanding contingent 
liabilities on the corresponding duty exemptions. However, as explained 
above, in keeping with our practice, we have only accepted those claims 
that are accompanied by official letters from the GOI indicating that 
the company met its export obligation. Thus, for purposes of 
calculating the benefit, we treated licenses without accompanying 
letters from the GOI as contingent liabilities.
    For those licenses for which respondents demonstrated that they had 
fulfilled the export obligations, we followed our methodology set forth 
in the Final Determination of Lined Paper Investigation and treated the 
import duty savings as grants received in the year in which the GOI 
waived the contingent liability on the import duty exemptions. In 
accordance with 19 CFR 351.524(b)(2), for each of the grant amounts, we 
performed the ``0.5 percent test'' to determine whether the benefit 
should be fully expensed in the year of receipt or allocated over the 
AUL used in this proceeding pursuant to the grant allocation 
methodology set forth in 19 CFR 351.524(d)(1).
    JSW, Essar, Tata, and Ispat reported that they paid application 
fees in order to obtain their EPCGS licenses. We preliminarily find 
that the application fees paid qualify as an ``application fee,

[[Page 1586]]

deposit, or similar payment paid in order to qualify for, or to 
receive, the benefit of the countervailable subsidy.'' See Section 
771(6)(A) of the Act. As a result, we have offset the benefit in an 
amount equal to the fees paid.
    To calculate the company-specific subsidy rates for this program, 
we summed the benefits from the waived licenses, which we determine 
confer a benefit in the form of a grant, and from those licenses that 
have yet to be waived, which we determine confer a benefit in the form 
of contingent liability loans. With respect to licenses related to 
imports of capital goods during the POR, we prorated the contingent 
liability by the actual number of days the contingent liability was in 
effect during the POR. See Final Determination of Lined Paper 
Investigation Decision Memorandum at ``Export Promotion Capital Goods 
Scheme.'' We then divided the total benefits received by each company 
by the company's total export sales for the POR. Ispat reported making 
deemed export sales during the POR. Consistent with our approach in the 
Final Results of the 3\rd\ PET Film Review, we included deemed exports 
in the denominator of the net subsidy rate calculation. See Comment 1 
of the Final Results of 3\rd\ PET Film Review Decision Memorandum. On 
this basis, we preliminarily determine the net countervailable subsidy 
from this program to be 0.53 percent ad valorem for Essar, 10.51 
percent ad valorem for Ispat, 1.71 percent ad valorem for JSW, and 4.28 
percent ad valorem for Tata.

3. Duty Entitlement Passbook Scheme (DEPS)

    India's DEPS was enacted on April 1, 1997, as a successor program 
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 GOI has established a 
standard input/output norm (SION) for the exported product. DEPS 
credits can be used for any subsequent imports, regardless of whether 
they are consumed in the production of an export product. DEPS credits 
are valid for 12 months and are transferable after the foreign exchange 
is realized from the export sales on which the DEPS credits are earned. 
With respect to subject merchandise, the GOI has established a SION for 
the steel industry.
    The Department has previously determined that DEPS is a 
countervailable program. See, e.g., Final Determination of Lined Paper 
Investigation Decision Memorandum at ``Duty Entitlement Passbook 
Scheme.'' Specifically, we determined that under DEPS, a financial 
contribution, as defined under section 771(5)(D)(ii) of the Act, is 
provided because (1) the GOI provides credits for the future payment of 
import duties, and (2) the GOI does not have in place and does not 
apply a system that is reasonable and effective for determining what 
imports are consumed in the production of the exported product and in 
what amounts. Id. Therefore, under section 771(5)(E) of the Act, we 
determined that the entire amount of import duty exemption earned 
during the POR constitutes a benefit.\18\ We also found DEPS to be 
specific under section 771(5A)(B) of the Act because the program can 
only be used by exporters. See Final Determination of Lined Paper 
Investigation Decision Memorandum at ``Duty Entitlement Passbook 
Scheme.'' No new information or evidence of changed circumstances has 
been presented in this review to warrant reconsideration of the 
Department's finding.
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    \18\ Specifically, we found that benefits under the DEPS program 
are conferred as of the date of exportation of the shipment for 
which the pertinent DEPS credits are earned. See e.g., Notice of 
Preliminary Affirmative Countervailing Duty Determination and 
Preliminary Negative Critical Circumstances Determination: Certain 
Lined Paper Products From India, 71 FR 7916, 7920 (February 15, 
2006) (Preliminary Determination of Lined Paper Investigation) 
(unchanged in Final Determination of Lined Paper Investigation).
---------------------------------------------------------------------------

    We have previously determined that this program provides a 
recurring benefit under 19 CFR 351.519(c). See e.g., Preliminary 
Determination of Lined Paper Investigation 71 FR 7916, 7920 (unchanged 
in Final Determination of Lined Paper Investigation). In accordance 
with past practice and pursuant to 19 CFR 351.519(b)(2), we 
preliminarily find that benefits from the DEPS program are conferred as 
of the date of exportation of the shipment for which the DEPS credits 
are earned. See, e.g., Final Affirmative Determination: Certain Cut-to-
Length Carbon-Quality Steel Plate from India, 64 FR 73131 (December 29, 
1999) (Final Determination of CTL Plate Investigation) at Comment 4 
(explaining that for programs such as the DEPS, ``we calculate the 
benefit on an 'earned' basis (that is upon export) where it is provided 
as a percentage of the value of the exported merchandise on a shipment-
by-shipment basis and the exact amount of the exemption is known'').
    For those DEPS credits that JSW and Tata earned during the POR, we 
followed our past practice and calculated the benefit under the DEPS 
program by multiplying the FOB value of each export shipment to the 
United States during the POR by the relevant percentage of DEPS credit 
allowed under the program. Id. We then subtracted as an allowable 
offset the actual amount of application fees paid for each license in 
accordance with section 771(6) of the Act.
    Because DEPS credits are earned on a shipment-by-shipment basis, in 
calculating the benefit from the DEPS program, we normally calculate 
the net subsidy rate by dividing the benefit earned on subject 
merchandise export shipments to the United States by total sales of 
subject merchandise to the United States during the POR. In the case of 
JSW and Tata, we have followed this calculation methodology.
    On this basis, we preliminarily calculate the net countervailable 
subsidy from the DEPS program to be 2.56 percent ad valorem for JSW, 
and 1.29 percent ad valorem for Tata.

4. Sale of High-Grade Iron Ore for Less Than Adequate Remuneration

    The Department has previously determined that the GOI provides 
high-grade iron ore to steel producers for less than adequate 
remuneration through the government-owned National Mineral Development 
Corporation (NMDC). See Notice of Final Results of Countervailing Duty 
Administrative Review: Certain Hot-Rolled Carbon Steel Flat Products 
from India, 71 FR 28665 (May 17, 2006) (Final Results of Second HRC 
Review), and accompanying Issues and Decision Memorandum (Final Results 
of Second HRC Review Decision Memorandum) at ``Sale of High-Grade Iron 
Ore for Less Than Adequate Remuneration,'' see also Notice of 
Preliminary Results of Countervailing Duty Administrative Review: 
Certain Hot-Rolled Carbon Steel Flat Products from India, 71 FR 1512, 
1516 (January 10, 2006) (Preliminary Results of Second HRC Review). 
NMDC is governed by the Ministry of Steel and the GOI holds 98 percent 
of its shares. No new information has been provided to the Department 
by the GOI to warrant a reconsideration of our finding. Therefore, for 
this review, we preliminarily find that the GOI directly, through the 
government-owned NMDC, continues to provide a financial contribution as 
defined under section 771(5)(D)(iii) of the Act and that the GOI's 
provision of high-grade iron ore is specific under section 
771(5A)(D)(iii)(I) of the Act because the actual recipient of the 
subsidy is limited to industries that use iron ore, including the steel 
industry, and is thus limited in

[[Page 1587]]

number. Essar, Ispat, and JSW reported that they purchased high-grade 
iron ore lumps and fines (i.e., iron ore with Fe content of 64 percent 
or above) from the NMDC during the POR.
    Section 771(5)(E)(iv) of the Act provides that a benefit is 
conferred by a government when the government provides the good or 
service for less than adequate remuneration. Pursuant to 19 CFR 
351.511(a)(2)(i) the Department will normally seek to measure the 
adequacy of remuneration by comparing the government price for the 
goods or service to a market-determined price resulting from actual 
transactions in the country in question. The regulations provide that 
such market-determined prices could include prices stemming from actual 
transactions between private parties, actual imports, or, in certain 
circumstances, actual sales from competitively run government auctions.
    Ispat provided information concerning its purchases of iron ore 
lumps from private suppliers within India during the POR. There is no 
information on the record that suggests such private supplier prices do 
not reflect actual market-determined prices in India for comparable 
ore, or that such private-supplier prices have been distorted by GOI 
involvement in the market. Therefore, pursuant to 19 CFR 
351.511(a)(2)(I), we used such private prices as our benchmark for 
purposes of calculating the benefit from Ispat's purchases of iron ore 
lumps from the GOI.
    We made the following adjustments to the private iron ore lumps 
price used as the benchmark to measure the adequacy of remuneration of 
Ispat's purchases of iron ore lumps from the GOI. First, we calculated 
on a monthly basis a price per wet metric ton (including freight to the 
port). Next, we divided the sum of the monthly total costs by the total 
quantity of iron ore lumps Ispat purchased for the year. We then 
divided the resulting annual unit price by the corresponding iron ore 
content to arrive at the benchmark unit cost per Fe content (iron ore 
is priced by one unit of Fe content). Next, to ensure that the 
benchmark price reflects the same level of Fe content as the government 
price, we multiplied the benchmark unit cost per Fe content by the Fe 
content of the iron ore lumps Ispat purchased from the GOI.
    With respect to Essar's purchases of iron ore lumps and fines from 
the GOI, the record of this review contains no information on actual 
transaction prices between private parties in India, imports, or sales 
from government auctions that can be used to measure any benefit to 
Essar as a result of this program.\19\ Further, Ispat reported that it 
did not have any transactions between private parties in India, 
imports, or sales from government auctions of iron ore fines during the 
POR. Thus, for these transactions, the Department is unable to measure 
the adequacy of remuneration using actual market-determined prices in 
India, as directed by 19 CFR 351.511(a)(2)(i).
---------------------------------------------------------------------------

    \19\ The information, noted above, that Ispat provided 
concerning its purchases of iron ore lumps from private suppliers 
within India is business proprietary. As such, we are unable to use 
these private supplier prices to calculate a benefit for other 
recipients of either this program or the ``Captive Mining of Iron 
Ore'' program, noted below.
---------------------------------------------------------------------------

    Under 19 CFR 351.511(a)(2)(ii), where actual market-determined 
prices are not available with which to make the comparison under 
paragraph (a)(2)(i), the Department will seek to measure the adequacy 
of remuneration by comparing the government price to a world market 
price where it is reasonable to conclude that such prices would be 
available to purchasers in the country in question. This second tier 
directs the Department to examine prices which it would be reasonable 
to conclude that purchasers could obtain in India. There are 
publications on the record that include prices from the world market 
for comparable goods which can be used as a benchmark to determine 
whether the GOI sold high-grade iron ore to the respondents for less 
than adequate remuneration. Specifically, several copies of the Tex 
Report, a daily Japanese publication that reports on world-wide price 
negotiations for iron ore, are on the record and include prices for 
high-grade iron ore that were set for 2006.\20\ Therefore, consistent 
with our approach in the Final Results of Second HRC Review, we 
continue to find that the prices reported in the Tex Report constitute 
world market prices that would be available to the respondents in 
accordance with 19 CFR 351.511(a)(2)(ii). See Final Results of Second 
HRC Review Decision Memorandum at ``Sale of High-Grade Iron Ore for 
Less Than Adequate Remuneration.''
---------------------------------------------------------------------------

    \20\ Copies of several issues of the Tex Report reporting on 
negotiated iron ore prices with Australian, Brazilian iron ore 
producers and Japanese and European steel makers were submitted on 
the record by the GOI on November 15, 2007, and by Essar on November 
14, 2007.
---------------------------------------------------------------------------

    To measure the adequacy of remuneration of Essar's purchases of 
iron ore lumps and fines from the GOI and Ispat's purchases of iron ore 
fines from the GOI, we compared the prices that each company actually 
paid for its high-grade iron ore lumps and fines, on an fob port basis, 
to an average of the fob port prices of high-grade iron ore lumps and 
fines set forth in the Tex Report. We made the following adjustments to 
the benchmark information. We converted the iron ore lumps and fines' 
prices listed in U.S. cents per dry long ton to U.S. dollars. We then 
multiplied the per unit U.S. dollar price by the corresponding 
percentage of iron content (iron ore is priced by one unit of Fe 
content) to calculate a U.S. dollar high-grade iron ore amount. Next, 
we converted the U.S. dollar per unit price from dry long tons to 
metric tons. We then converted the U.S. dollar per unit price from 
metric tons to wet metric tons. Next, we applied the average exchange 
rate for 2006 to calculate a Rupee per wet metric ton price for high-
grade iron ore. We then averaged the prices to arrive at the benchmark 
used to compare against Essar's and Ispat's respective purchases of 
high-grade iron ore.
    To calculate the benefit, we multiplied the difference between the 
benchmark price and the government price by the quantity of iron ore 
lumps and fines purchased from the GOI. We then divided that amount by 
Essar's and Ispat's respective total sales for 2006. On this basis, we 
preliminarily calculate a net countervailable subsidy rate of 6.11 
percent ad valorem for Essar and 0.54 percent ad valorem for Ispat.
    As noted, JSW reported that it purchased high-grade iron ore fines 
and lumps from NMDC during the POR. JSW, however, submitted incomplete 
information to the Department's questions concerning the purchases. In 
particular, JSW submitted only the quantity of iron ore purchased from 
NMDC and no associated pricing data. See JSW's November 19, 2007, 
Supplemental Questionnaire Response at Table A. Therefore, as AFA, for 
these preliminary results, we find that JSW received the iron ore from 
NMDC at no charge during the POR. To calculate the benefit, we 
multiplied the quantity of iron ore JSW received from NMDC in 2006, by 
the benchmark price for iron ore fines and lumps, obtained from the Tex 
Report. We then divided the benefit by JSW's total sales for 2006. On 
this basis, we preliminarily calculate a program rate of 9.01 percent 
ad valorem for JSW.

5. Advance License Program (ALP)

    Under the ALP, exporters may import, duty free, specified 
quantities of materials required to manufacture products that are 
subsequently exported. The exporting companies, however, remain 
contingently liable for the unpaid duties until they have

[[Page 1588]]

fulfilled their export requirement. The quantities of imported 
materials and exported finished products are linked through SIONs 
established by the GOI. During the POR, Essar and Ispat used advance 
licenses to import certain materials duty free.
    The Department has previously found this program to be 
countervailable because under the 2002 - 2007 Export/Import Policy 
Guidelines, the GOI does not have in place, and does not apply, a 
system that is reasonable and effective for determining what imports 
are consumed in the production of the exported product and in what 
amounts, in accordance with 19 CFR 351.519(a)(4). See e.g., Final 
Results of Countervailing Duty Administrative Review: Polyethylene 
Terephthalate Film, Sheet, and Strip from India, 71 FR 7534 (February 
13, 2006) (Final Results of 2\nd\ PET Film Review), and accompanying 
Issues and Decision Memorandum (Final Results of 2\nd\ PET Film Review 
Decision Memorandum) at ``Advance License Program'' and ``Comment 1;'' 
see also Final Determination of Lined Paper Investigation Decision 
Memorandum at ``Advance License Program.'' In the Final Results of 
2\nd\ PET Film Review, the Department found that the ALP confers a 
countervailable subsidy because: (1) a financial contribution, as 
defined under section 771(5)(D)(ii) of the Act, is provided under the 
program, as the GOI exempts the respondents from the payment of import 
duties; (2) the GOI does not have in place and does not apply a system 
that is reasonable and effective for the purposes intended in 
accordance with 19 CFR 351.519(a)(4) to confirm which inputs and in 
what amounts are consumed in the production of the exported products; 
thus, the entire amount of the import duty deferral or exemption earned 
by the respondent constitutes a benefit under section 771(5)(E) of the 
Act; and (3) this program is contingent upon exportation and, 
therefore, is specific under section 771(5A)(B) of the Act. See Final 
Results of 2\nd\ PET Film Review Decision Memorandum at Comment 1.
    Also, in the Final Results of 2\nd\ PET Film Review, the Department 
identified a number of systemic deficiencies that led to its 
determination, specifically: (1) the lack of information related to 
verification or implementation of penalties and the failure to identify 
the number of companies during the POR that either did not meet export 
commitments under the ALP, were penalized for not meeting the export 
requirements under the ALP, or were penalized for claiming excessive 
credits; (2) the availability of ALP benefits for a broad category of 
``deemed'' exports; and (3) the GOI's inability to provide the SION 
calculations for the PET film industry or any documentation 
demonstrating that the process outlined in its regulations was actually 
applied in calculating the PET film SION. Id.
    In the Final Determination of Lined Paper Investigation, the 
Department stated that it had examined certain monitoring procedures 
with respect to the GOI's tracking of inputs and exports through the 
Directorate General for Foreign Trade (DGFT), and the tracking of 
inputs imported duty-free under the ALP through a customs database. See 
Final Determination of Lined Paper Investigation Decision Memorandum at 
Comment 10. However, in the investigation, the Department ultimately 
determined that, in spite of these procedures, systemic issues 
continued to exist that demonstrate that the GOI lacks a system or 
procedure to confirm which inputs are consumed in the production of the 
exported products and in what amounts that is reasonable and effective 
for the purposes intended, as required under 19 CFR 351.519. For 
example, in the Final Determination of Lined Paper Investigation, the 
Department explained that while we confirmed at verification that the 
GOI had recently updated the SION for the lined paper industry, the GOI 
was unable to provide source documents concerning the initial formation 
and subsequent revision of the SION used for the lined paper industry, 
including the SION in effect during the period of investigation. Id. 
The Department further stated that neither the GOI nor the respondent 
claimed that the laws and procedures underlying the ALP had changed 
with respect to the issue of ``deemed exports'' during that 
investigation. Thus, the Department determined that the respondent 
failed to provide information demonstrating that the ALP was 
implemented and monitored effectively during the period of 
investigation, and continued to find that the GOI had not demonstrated 
that it had carried out an examination of actual inputs involved to 
confirm which inputs were consumed in the production of the exported 
product, and in what amounts or that the ALP was reasonable and 
effective for the purposes intended.
    In this administrative review, the GOI indicated that it had 
revised its Foreign Trade Policy and Handbook of Procedures for ALP 
prior to the POR. Specifically, the GOI revisions, introduced on May 
13, 2005, provided for a mechanism to review a SION and monitor a 
company's consumption and stocks of duty-free, imported or domestically 
procured, raw materials. The GOI revised its Foreign Trade Policy and 
Handbook of Procedures to update its consumption register on inputs 
imported and inputs consumed to be filed by companies with the 
DGFT.\21\ Further, the GOI stated that in the case of excess duty-free 
inputs, penalties have been put in place for the exporter.
---------------------------------------------------------------------------

    \21\ The revision pertains to Appendix 23, which replaced the 
previous version, Appendix 18 of the Foreign Trade Policy and 
Handbook of Procedures. Appendix 23 states the consumption and stock 
of inputs for each SION. It provides details of inputs, quantity 
imported, name of the finished product produced, quantity of the 
finished product, inputs actually consumed for the exported product, 
excess imports, if any, and actual consumption. According to the 
GOI, producers/exporters are required to file Appendix 23 with the 
DGFT at the beginning of each year. According to the GOI, the 
details of Appendix 23 are then cross-verified and authenticated by 
independent chartered accountants.
---------------------------------------------------------------------------

    In addition, the GOI argues that it has also put into place an 
internal system of regularly monitoring and reviewing SIONs. The GOI 
refers to Chapter 4, paragraphs 4.10-4.10.2 of the Foreign Trade and 
Policy Handbook of Procedures, which states that:
    {a{time} t the beginning of the financial year or at any other 
time as the {Norms Committee (NC){time}  may find it necessary, NC 
may identify the SIONs which in its opinion are required to be 
reviewed. The exporters are required to submit revised data in form 
given in 'Aayaat Niryaat Form' for such revision. It is mandatory 
for the industry/exporter(s) to provide production and consumption 
data etc. as may be required by DGFT/EPC for revision of SION. 
Otherwise, the applicant shall not be allowed to take the benefit of 
Advance Authorization Scheme.
In addition, in this administrative review the GOI argues that advance 
licenses are issued with actual user conditions and are not 
transferable even after completion of the export obligation.
    The Department has analyzed the changes introduced by the GOI to 
the ALP during 2005 and acknowledges certain improvements to the ALP 
system. However, we preliminarily determine that systemic issues 
continued to exist in the ALP system during the POR, all of which were 
enumerated in the Final Results of 2\nd\ PET Film Review and the Final 
Determination of Lined Paper Investigation. For example, while the GOI 
pointed to provisions in the Handbook of Procedures that lay out the 
procedures for the levying of penalties, the GOI did not demonstrate 
any enforcement of these deadlines and actual application of the 
penalty provisions. See Final Results of 2\nd\ PET

[[Page 1589]]

Film Review Decision Memorandum at ``Advance License Program'' and 
Final Determination of Lined Paper Investigation Decision Memorandum at 
``Advance License Program.'' In addition, the GOI did not place any 
supporting documentation on the record of this review that demonstrates 
enforcement procedures for the DGFT and the Customs Authorities, 
respectively, as addressed in the Final Results of 2\nd\ PET Film 
Review Decision Memorandum, and as requested in the initial and 
supplemental questionnaires of this review.
    Furthermore, while the GOI points to certain provisions that 
provide for the review of SIONs, the GOI was not able to demonstrate 
the existence of a legal or regulatory requirement or process required 
for the DGFT to monitor the continued accuracy of the SION. Also, the 
GOI did not provide a layout of the regulatory procedures regarding the 
review of the SION or revision and selection of SIONs. Instead, the GOI 
stated that it decides which SIONs are to be reviewed based on the 
inputs received from various concerned government authorities. Thus, we 
preliminarily determine the GOI has not demonstrated that it has a 
process in place to ensure that all SIONs are reviewed regularly and 
consistently as part of the ALP monitoring system.
    Therefore, despite the changes to the ALP noted by the GOI, we 
preliminarily determine that systemic problems continue to exist, and 
consequently we find that the GOI lacks a system or procedure to 
confirm which inputs are consumed in the production of the exported 
products and in what amounts that is reasonable and effective for the 
purposes intended, as required under 19 CFR 351.519.
    Pursuant to 19 CFR 351.519(c), the exemption of import duties on 
inputs consumed in production of an exported product normally provides 
a recurring benefit. Under this program Essar and Ispat did not have to 
pay certain import duties for inputs that were used in the production 
of subject merchandise. Thus, we treated the benefit provided under the 
ALP as a recurring benefit. To calculate the subsidy, we first 
determined the total value of duties exempted during the POR for each 
company. From this amount, we subtracted the required application fees 
paid for each license during the POR as an allowable offset in 
accordance with section 771(6) of the Act.
    Consistent with our practice, we attributed benefits under the ALP 
to the recipient's export sales. Accordingly, to calculate the net 
subsidy rate, we divided the resulting net benefit by Essar's and 
Ispat's respective total export sales for the POR. Consistent with our 
approach in recent Indian proceedings involving the ALP, we 
preliminarily determine that ``deemed export'' sales should be included 
in the export sales denominator for the ALP program only when the 
respondent applied for and was granted licenses during the POR based on 
both physical exports and deemed exports. See Comment 1 of the Final 
Results of 3\rd\ PET Film Review Decision Memorandum.
    As noted above, Ispat reported deemed export sales during the POR. 
Because Ispat did not provide information regarding the extent to which 
its licenses were earned via deemed exports, we have therefore limited 
the denominator of the net subsidy rate calculation to physical 
exports. On this basis, we preliminarily determine the net 
countervailable subsidy rate under the ALP to be 0.13 percent ad 
valorem for Essar and 0.50 percent ad valorem for Ispat.

6. Loan Guarantees from the GOI

    In the underlying investigation, the Department found that the GOI 
or State Bank of India (SBI) provides loan guarantees on a case-by-case 
basis to particular industrial sectors. See Final Determination of HRC 
Investigation, 64 FR at 73137. We further determined, in accordance 
with section 771(5)(D)(i) of the Act, that GOI loan guarantees confer 
countervailable subsidies because they result in a financial 
contribution by the government in the form of a potential direct 
transfer of funds or liabilities. In accordance with section 
771(5)(E)(iii) of the Act, the loan guarantees provide a benefit to the 
recipient in the amount of the difference between the amount the 
recipient pays on the guaranteed loan and the amount the recipient 
would pay for a comparable commercial loan if there were no government 
guarantee. Moreover, as we determined in the Final Determination of HRC 
Investigation, these loan guarantees are limited to certain companies 
selected by the GOI on an ad hoc basis and, thus, the program is 
specific under section 771(5A)(D)(iii)(II) of the Act. Id.
    In the instant review, JSW reported having loan guarantees from the 
SBI for certain long-term foreign currency denominated loans 
outstanding during the POR. No new information or evidence of changed 
circumstances has been presented in this review to warrant 
reconsideration of the Department's finding that loan guarantees from 
the SBI are countervailable.
    In order to determine whether the government guarantees that JSW 
received conferred a benefit under section 771(5)(E)(iii) of the Act, 
we compared the total amount JSW paid for the guaranteed loans with the 
benchmark interest rates that would have been charged on a comparable 
commercial loan.\22\ Consistent with the approach discussed in the 
``Subsidies Valuation Information'' section, supra, where available, as 
our benchmark we used the interest rate on comparable, foreign currency 
loans that JSW received from commercial lenders. Where company-specific 
benchmarks were unavailable, consistent with our practice, we used the 
lending rate for the appropriate foreign currency, as reported by the 
IMF. See Final Determination of HRC Investigation Decision Memorandum 
at ``Benchmarks for Loans and Discount Rate.''
---------------------------------------------------------------------------

    \22\ There is no information on the record regarding what, if 
any, guarantee fees may have applied, so no adjustment has been made 
in this regard.
---------------------------------------------------------------------------

    To calculate the net subsidy rate, we divided the benefit by JSW's 
total sales. On this basis, we calculated net subsidy rate of 0.01 
percent ad valorem for JSW.

7. Steel Development Fund Loans

    The Steel Development Fund (SDF) was established in 1978, during a 
time when the steel sector in India was subject to price and 
distribution controls. From 1978 through 1994, India's integrated steel 
producers, SAIL, Tata, Rashtriya Ispat Nigam Limited (RINL), and India 
Iron & Steel Company Limited (IISCO), were mandated by the GOI to 
increase the prices for the products they sold. The proceeds from the 
price increases (i.e., levies) were remitted to the SDF. Under the SDF 
program, companies that contributed to the fund are eligible to take 
out long-term loans at advantageous rates. Loans from the SDF are made 
for the following purposes: (1) finance capital improvements and 
research and development projects; (2) provide funding for rebates to 
the Small Scale Industries Corporations on supplies by those companies; 
and (3) meet the expenditures of the Economic Research Unit of the 
Joint Plant Committee (JPC).
    In the underlying investigation, the Department examined loans 
under the SDF. See Final Determination of HRC Investigation Decision 
Memorandum at ``Loans from the Steel Development Fund.'' The Department 
found that the Commission for Iron and Steel, which is known as CI&S, 
is led by the Secretary of the Ministry of Steel. This official is an 
ex-officio member of the SDF Managing Committee, and Chairman of

[[Page 1590]]

the JPC. The issuance and administration of loans under the SDF program 
are supervised by the JPC. However, according to the GOI, all of the 
SDF's lending decisions are subject to the review and approval of the 
SDF Managing Committee. See Notice of Preliminary Affirmative 
Countervailing Duty Determination and Alignment of Final Countervailing 
Determination With Final Antidumping Duty Determinations: Certain Hot-
Rolled Carbon Steel Flat Products From India, 66 FR 20240, 20248 (April 
20, 2001) (Preliminary Determination of HRC Investigation) (unchanged 
in the Final Determination of HRC Investigation).
    In the underlying investigation, we also found that the levies 
originated from producer price increases that were mandated and 
determined by the JPC. Because the Secretary of the Ministry of Steel, 
in his capacity as the head of the CI&S, acts as an ex-officio member 
and Chairman of the JPC, we determined that the GOI, through the JPC, 
has a controlling interest in the manner and amount of contributions 
that are made to the SDF. See Preliminary Determination of HRC 
Investigation, 66 FR at 20248 (unchanged in Final Determination of HRC 
Investigation). In particular, we found that during the period in which 
the funds for the SDF were provided, the GOI controlled the price of 
steel products in India. In order to create the SDF, the GOI, acting 
through the JPC, mandated steel price increases which were earmarked 
for the SDF. Steel producers collected this price increase, which was 
paid by steel consumers in India, and these additional funds were then 
placed into the SDF as a source of concessional financing for the 
Indian steel industry. Therefore, in the underlying investigation, we 
concluded that the GOI played a direct role in the creation of the SDF 
by mandating price increases on steel products, which were authorized 
for use solely as a source of funds for the SDF. Id.
    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. In the underlying investigation, we determined that the 
GOI directed the contribution of funds for the SDF within the meaning 
of section 771(5)(B) of the Act, by levying price increases on steel 
products which were routed into the SDF. Furthermore, because the 
Secretary of the Ministry of Steel has a major leadership role in the 
JPC and the SDF Managing Committee, the bodies that issue and 
administer loans under the SDF, we determined that the GOI exercises 
control over the way in which funding is disbursed under this program. 
Id.
    Therefore, in the underlying investigation, we determined that 
loans under the SDF constitute a financial contribution within the 
meaning of section 771(5)(D)(i) of the Act. We also determined that 
loans under the SDF are specific within the meaning of section 
771(5A)(D)(i) of the Act because eligibility for loans from the SDF is 
limited to steel companies. We further found that loans under the SDF 
program confer a benefit under section 771(5)(E)(ii) of the Act to the 
extent that the interest paid under the program during the POR was less 
than what would have been charged on a comparable commercial loan. Id. 
No new or substantive evidence of changed circumstances has been 
submitted in this proceeding to warrant reconsideration of this 
determination.
    In the instant administrative review, Tata reported SDF loans 
outstanding during the POR. In order to determine whether Tata's loans 
under the SDF program conferred a benefit within the meaning of section 
771(5)(E)(ii) of the Act, we compared the actual interest rates charged 
to the benchmark interest rates that would have been charged on a 
comparable commercial loan. As discussed in the ``Subsidies Valuation 
Information,'' supra, where available we used as our benchmark the 
weighted-average interest rates on Tata's rupee-denominated, long-term 
loans. For those years in which no company-specific long-term benchmark 
was available for Tata, we used the average interest rate for India's 
PLR, as published by the RBI. Our comparison of the interest rates 
indicates that the interest rate payments that Tata made under the SDF 
program were less than what it would have otherwise paid on a 
comparable commercial loan. Thus, we preliminarily determine that the 
interest savings realized under this program conferred a benefit upon 
Tata.
    To calculate the net subsidy rate, we divided the total amount of 
interest savings Tata obtained under this program during the POR by its 
total sales for the POR. Our calculation of the net subsidy rate is 
consistent with our approach in the underlying investigation. See 
Preliminary Determination of HRC Investigation, 66 FR at 20248 
(unchanged in Final Determination of HRC Investigation). On this basis, 
we preliminarily determine the net countervailable subsidy to be 0.41 
percent ad valorem for Tata.

8. Target Plus Scheme (TPS)

    On September 1, 2004, the GOI introduced the TPS in the 2004 - 2009 
edition of its ``Foreign Trade Policy'' handbook. Under TPS, exporting 
companies are eligible for duty credit entitlement certificates for the 
percentage of incremental growth in exports made during the 2004-2005 
period, as compared to the 2003-2004 period.
    Tata reported earning credits under the TPS prior to and during the 
POR. JSW reported that it used TPS credits earned prior to the POR to 
import various items during the POR. In its questionnaire response, JSW 
also reported that it did not apply for or earn TPS credits during the 
POR.
    We preliminarily find this program to be similar to the DEPS 
program, which is countervailable, in that all exporters are eligible 
to earn value-based TPS credits on a post-export basis, and may use the 
credits for the purpose of paying customs duty on subsequent imports of 
any input, regardless of whether they are consumed in the production of 
an exported product.\23\ Similar to the Department's approach under 
DEPS, we preliminarily determine that a financial contribution, in the 
form of revenue forgone, as defined under section 771(5)(D)(ii) of the 
Act, is provided under the TPS program because the GOI provides credits 
for the future payment of import duties. We also preliminarily find 
that the TPS program provides a benefit. The GOI does not have in place 
and does not apply a system that is reasonable and effective for the 
purposes intended to confirm which inputs, and in what amounts, are 
consumed in the production of the exported products. Therefore, in 
accordance with 19 CFR 351.519(a)(4) and section 771(5)(E) of the Act, 
the entire amount of import duty exemption earned during the POR 
constitutes a benefit. Further, because the TPS program can only be 
used by exporters, we preliminary determine that the program is 
specific under section 771(5A)(B) of the Act.
---------------------------------------------------------------------------

    \23\ However, unlike DEPS licenses, TPS licenses are not 
transferable.
---------------------------------------------------------------------------

    We also preliminarily determine that the TPS credits provide a 
recurring benefit under 19 CFR 351.519(c). In keeping with our approach 
concerning value-based licenses like those provided under the DEPS, we 
calculated the benefit under the TPS on an ``as-earned'' basis because 
the amount of the exemption is known at the time the TPS license is 
earned. However, unlike the DEPS, TPS credits are not tied to 
particular sales. Rather, under the TPS,

[[Page 1591]]

credits are provided as a percentage of the value of incremental growth 
in the exported merchandise. As such, participating firms do not know 
the value of TPS credits they have earned until they receive the TPS 
license. Therefore, for purposes of these preliminary results, we find 
that the date on which participating firms receive their TPS licenses 
constitutes the time period in which benefits are earned. Accordingly, 
for purposes of these preliminary results, we have not included TPS 
credits earned prior to the POR in our benefit calculations. Under this 
approach, we therefore preliminarily determine that JSW did not benefit 
from the TPS during the POR.
    For purposes of calculating the benefit under the TPS for Tata, we 
summed all TPS credit earned by Tata during the POR. We then 
subtracted, as an allowable offset, the actual amount of any 
application fees paid for each license in accordance with section 
771(6) of the Act.
    As stated above, we preliminarily determine that TPS credits are 
contingent upon export activity, but unlike the DEPS, the credits are 
not tied to particular sales. Therefore, to calculate the net subsidy 
rate, we divided the amount of TPS credits earned during the POR by 
Tata's total export sales for the POR. On this basis, we preliminarily 
determine Tata's net countervailable subsidy rate under the program to 
be 1.80 percent ad valorem.
    In its questionnaire response, JSW also stated that the TPS program 
was eliminated on April 1, 2006. The company provided a copy of a GOI 
document announcing the termination of the program.
    We further note that 19 CFR 351.526(d) provides that the Department 
will not adjust the cash deposit rate if the program-wide change 
consists of a terminated program and: (1) the Department determines 
that residual benefits may continue to be bestowed under the terminated 
program, or (2) the Department determines that a substitute program for 
the terminated program has been introduced and the Department is not 
able to measure the amount of countervailable subsidies provided under 
the substitute program. However, in this review, the GOI has not 
provided the required information regarding residual benefits and 
successor programs, as discussed under 19 CFR 351.526(d).
    Thus, because the GOI has not provided the required information 
regarding the termination of and any residual benefits from the 
program, or possible substitute programs, we cannot take a program-wide 
change into account in this administrative review. In any future 
countervailing duty proceedings involving merchandise from India and 
this program, the GOI will have with the opportunity to demonstrate 
whether a program-wide change has occurred with respect to the TPS 
under 19 CFR 351.526.

9. Captive Mining of Iron Ore

    Under the Mines and Minerals Development and Regulation Act of 
1957, as amended, (MMDR) and the Mineral Concession Rules of 1960, as 
amended, the GOI grants captive mining rights for minerals, including 
iron ore, to eligible applicants. The MMDR includes a schedule that 
lists minerals for which mining rights are controlled by the GOI. Iron 
ore is included on this schedule.
    According to documents issued by the GOI, captive mining rights of 
iron ore are limited to a small group of companies. For example, 
according to a report issued by the GOI's Ministry of Steel, captive 
mining rights of iron ore are limited to a handful of steel and mining 
companies, including Tata. See The Report of the ``Export Group'' on 
Preferential Grant of Mining Leases for Iron Ore, Manganese Ore and 
Chrome Ore, as issued by the Ministry of Steel at page 50, which was 
included as Exhibit 3 of petitioner's May 23, 2007, submission. In 
addition, a study commission by the GOI further indicates that the 
GOI's provision of captive iron ore mining rights has been largely 
limited to large Indian steel producers. See National Mineral Policy, 
Report of the High Level Committee (a.k.a., the Hoda Report) at page 
143, which was included as Exhibit 10 of petitioner's May 23, 2007, 
submission.
    We preliminarily determine that the provision of iron ore under 
this program constitutes a financial contribution, in the form of a 
provision of a good, within the meaning of section (771)(D)(iii) of the 
Act. Furthermore, we preliminarily determine that the provision of iron 
ore under the Captive Mining Rights program is de facto specific under 
section 771(5A)(D)(iii)(I) of the Act because the provision of captive 
iron ore mining rights is limited to certain enterprises, such as steel 
producers.
    Section 771(5)(E)(iv) of the Act provides that a benefit is 
conferred by a government when the government provides the good or 
service for less than adequate remuneration. Pursuant to 19 CFR 
351.511(a)(2)(i) the Department will normally seek to measure the 
adequacy of remuneration by comparing the government price for the 
goods or service to a market-determined price resulting from actual 
transactions in the country in question. The regulations provide that 
such market-determined prices could include prices stemming from actual 
transactions between private parties, actual imports, or, in certain 
circumstances, actual sales from competitively run government auctions.
    Tata reported that its sole source of iron ore during the POR was 
through the captive mining rights program. Thus, Tata was not able to 
provide a market-determined benchmark price resulting from actual 
transactions in the country in question, as described under 19 CFR 
351.511(a)(2)(i).
    Under 19 CFR 351.511(a)(2)(ii), if there is no useable market-
determined price with which to make the comparison under sub-paragraph 
(a)(2)(i), the Department will seek to measure the adequacy of 
remuneration by comparing the government price to a world market price 
where it is reasonable to conclude that such price would be available 
to purchasers in the country in question. This second tier directs the 
Department to examine prices which it would be reasonable to conclude 
that purchasers could obtain in India. There are publications on the 
record that include prices from the world market for comparable goods 
which can be used as a benchmark to determine whether the GOI sold 
high-grade iron ore to the respondents for less than adequate 
remuneration. As explained above in the ``Sale of High-Grade Iron Ore 
for Less Than Adequate Remuneration'' section of these preliminary 
results, copies of the Tex Report, which contain are on the record and 
include prices for high-grade iron ore that were set for 2006. 
Therefore, consistent with our approach in the Final Results of Second 
HRC Review, we continue to find that the prices reported in the Tex 
Report constitute world market prices that would be available to the 
respondents in accordance with 19 CFR 351.511(a)(2)(ii). See Final 
Results of Second HRC Review Decision Memorandum at ``Sale of High-
Grade Iron Ore for Less Than Adequate Remuneration.''
    To calculate the benefit, we first derived a per unit price for the 
iron ore that Tata extracted under the captive mining rights program. 
Specifically, we calculated a per unit price for the captive mining 
fees Tata paid to government entities during the POR. To this amount, 
we added the operational mining costs, on a per unit basis, which 
consisted of materials, labor, depreciation, overhead, and royalties. 
We then compared this total per unit cost to the per unit iron ore 
benchmark.

[[Page 1592]]

We made the following adjustments to the benchmark information. We 
converted the iron ore fines' prices listed in U.S. cents per dry long 
ton to U.S. dollars. We then multiplied the per unit U.S. dollar price 
by the corresponding percentage of iron content (iron ore is priced by 
one unit of Fe content) to calculate a U.S. dollar high-grade iron ore 
amount. Next, we converted the U.S. dollar per unit price from dry long 
tons to metric tons. We then applied the average exchange rate for 2006 
to calculate a Rupee per metric ton price for high-grade iron ore. We 
then averaged the prices to arrive at the benchmark used to compare 
against Tata's per unit cost of iron ore. To calculate the benefit, we 
multiplied the difference between the government per unit price and the 
benchmark per unit price by the total amount of iron ore Tata mined 
from government sources under the program.
    To calculate the net subsidy rate, we divided the benefit by Tata's 
total sales during the POR. On this basis, we calculated a net subsidy 
rate of 9.42 percent ad valorem for Tata.
    In its November 1, 2007, supplemental questionnaire response, JSW 
stated that the GOI did not provide captive mining rights to the 
company. We issued supplemental questions regarding captive mining 
rights on November 8, 2007. JSW did not submit a response to that 
supplemental questionnaire. Because JSW did not provide any further 
information or supporting documentation to substantiate the company's 
non-use of captive mining rights, we are applying facts available with 
an adverse inference to address these omissions. Accordingly, we 
preliminarily find that the net subsidy rate for this program is 16.63 
percent ad valorem for JSW.

10. Captive Mining Rights of Coal

    In 1973, the GOI nationalized coal mining under the Coal Mines 
Nationalization Act. The legislation initially reserved coal mining for 
public companies. However, pursuant to the Coal Mines Nationalization 
Amendment Act of 1976, the law was revised to allow private iron and 
steel companies to mine for coal for captive use (i.e., the right of 
selected companies to extract coal from government-owned land for use 
in their production processes). In 1993 through 1996, the GOI amended 
the Act to also allow power companies and the cement industry to mine 
coal for captive use.
    Under the program, the GOI, in conjunction with local state 
governments, grants captive mining rights of coal in what is referred 
to as captive coal blocks. According to a document produced by the 
GOI's Ministry of Coal entitled, ``Guidelines for Allocation of Captive 
Blocks and Conditions of Allotment Through the Screening Committee,'' 
in granting captive coal blocks, preference shall be accorded to steel 
plants with annual capacities of more than one million metric tons. See 
Guidelines for Allocation of Captive Blocks and Conditions of Allotment 
Through the Screening Committee at Exhibit 23 of petitioner's May 23, 
2007, submission.
    In its questionnaire response, Tata acknowledged that the GOI and 
the State Government of Jharkhand (GOJ) granted it captive coal mining 
rights. Tata further acknowledged that during the POR it used such 
captive coal mining rights to extra coal from government-owned land 
located in West Bokaro and Jharia, in the state of Jharkhand.
    We preliminarily determine that the provision of coal under this 
program constitutes a financial contribution, in the form of a 
provision of a good, within the meaning of section (771)(D)(iii) of the 
Act. Furthermore, we preliminarily determine that the provision of coal 
under the Captive Mining Rights program is de jure specific under 
section 771(5A)(D)(i) of the Act because preference is given in the 
allocation of coal blocks to steel producers whose annual production 
capacity exceeds one millions tons.
    Section 771(5)(E)(iv) of the Act provides that a benefit is 
conferred by a government when the government provides the good or 
service for less than adequate remuneration. Pursuant to 19 CFR 
351.511(a)(2)(i) the Department will normally seek to measure the 
adequacy of remuneration by comparing the government price for the 
goods or service to a market-determined price resulting from actual 
transactions in the country in question. The regulations provide that 
such market-determined prices could include prices stemming from actual 
transactions between private parties, actual imports, or, in certain 
circumstances, actual sales from competitively run government auctions.
    Tata reported importing coal from a private supplier during the 
POR. There is no information on the record that suggests such private 
supplier prices do not reflect actual market-determined prices in India 
for comparable ore, or that such private-supplier prices have been 
distorted by GOI involvement in the market. Therefore, pursuant to 
section 19 CFR 351.511(a)(2)(i), we used such private prices as our 
benchmark for purposes of calculating the benefit from Tata's purchases 
of coal under the captive mining rights program.
    To calculate the benefit, we first derived a per unit price for the 
coal that Tata extracted under the captive mining rights program. 
Specifically, we calculated a per unit price for the captive mining 
fees Tata paid to government entities during the POR. To this amount, 
we added the operational mining costs, on a per unit basis, which 
consisted of materials, labor, depreciation, overhead, and royalties. 
We then compared this total per unit cost to the per unit price that 
Tata paid for the coal it imported from commercial sources during the 
POR. To calculate the benefit, we multiplied the difference between the 
government per unit price and the imported per unit price by the total 
amount of coal Tata mined from government sources under the program.
    To calculate the net subsidy rate, we divided the benefit by Tata's 
total sales during the POR. On this basis, we calculated a net subsidy 
rate of 12.01 percent ad valorem for Tata.

B. State Government of Gujarat Programs

1. State Government of Gujarat Tax Incentives

    Pursuant to a 1995 Industrial Policy of Gujarat and an Incentive 
Policy of 1995-2000, the State Government of Gujarat (GOG) offered 
incentives, such as sales tax exemptions and deferrals, to companies 
that locate or invest in certain disadvantaged or rural areas in the 
State of Gujarat. A company could be eligible to claim exemptions or 
deferrals valued up to 90 percent of the total eligible capital 
investment. These policies exempt companies from paying sales tax on 
the purchases of raw materials, consumable stores, packing materials 
and processing materials. Other available benefits include exemption or 
deferment from sales tax and turnover tax on the sale of intermediate 
products, by-products, and scrap. The Pioneer and Prestigious programs 
are the two programs that are available under this policy. To be 
eligible for the incentives, companies must have made a fixed capital 
investment of over 5 crores (Pioneer Scheme) or 300 crores (Prestigious 
Scheme) in a qualified under-developed area in the state of Gujarat. 
See Preliminary Results of Second HRC Review, 71 FR 1512, 1514; see 
also the Final Results of Second HRC Review Decision Memorandum at 
``State Government of Gujarat (SGOG) Tax Incentives.''

[[Page 1593]]

    The amount of the eligible capital investment is linked to the 
amount of the incentives received over a period of eight to 14 years, 
depending on the category of participation. For the Pioneer Scheme, 
which initially began in 1986, companies making a capital investment 
during 1986 and 1991 were allowed to utilize this program. For the 
Prestigious Scheme, tax incentives were offered only for investment 
units which started production between 1990 and 1995. See Preliminary 
Results of Second HRC Review, 71 FR at 1514 and Final Results of Second 
HRC Review Decision Memorandum at ``State Government of Gujarat (SGOG) 
Tax Incentives'' section. In the current review, Essar stated that it 
completed the 14-year sales tax exemption granted under the Pioneer 
Scheme on July 31, 2004, and, therefore, sales taxes offered under the 
program were not available to Essar during the POR. However, Essar 
indicated that it received sale tax exemptions under the Prestigious 
program from the beginning of the POR through March 31, 2006.
    In the Final Determination of PET Resin Investigation, the 
Department determined that the sales tax exemptions under the 
Prestigious Scheme resulted in companies not paying the state sales tax 
otherwise due, and thus constituted a countervailable subsidy. See 
Final Affirmative Countervailing Duty Determination: Bottle-Grade 
Polyethylene Terephthalate (PET) Resin from India, 70 DR 13460 (March 
21, 2005) (Final Determination of PET Resin Investigation), and the 
``State of Gujarat (SOG) Sales Tax Incentive Scheme'' section of the 
accompanying Issues and Decision Memorandum (Final Determination of PET 
Resin Investigation Decision Memorandum). Consistent with our findings 
in the Final Determination of PET Resin Investigation, we preliminarily 
determine that this program is countervailable. We preliminarily 
determine that the program is limited to only those companies that make 
an investment in a specified disadvantaged area and is therefore 
specific under section 771(5A)(D)(iv) of the Act. We also preliminarily 
find that the GOG provides a financial contribution under section 
771(5)(D)(ii) of the Act by foregoing the collection of sales tax 
revenue and that Essar receives a benefit under section 771(5)(E) of 
the Act in the amount of sales tax that Essar does not pay.
    In the case of an exemption of an indirect tax, the Department will 
consider the benefit as having been received at the time the recipient 
firm otherwise would be required to pay the indirect tax. See 19 CFR 
351.510(b)(1). We preliminarily determine that the date Essar otherwise 
would be required to pay the exempted sales taxes corresponds to the 
date of the annual state tax return Essar filed during the POR, which 
is the return covering the period April 1, 2005, through March 31, 
2006. Therefore, to calculate the benefit under the Prestigious program 
we summed the amount of sales tax exemptions Essar received, as 
indicated by the annual state tax return Essar filed during the POR.
    To calculate the net subsidy rate, we divided the benefit amount by 
Essar's total sales. On this basis, we preliminarily calculated an ad 
valorem rate of 1.08 percent for Essar.
    In the course of explaining its use of the Pioneer and Prestigious 
Schemes, Essar stated that it also used a Value Added Tax (VAT) that 
the GOG established on April 1, 2006. According to Essar, the system 
remits VAT to eligible firms using the balance of tax incentives under 
the Prestigious Scheme that remained unutilized after the end of the 8- 
to 14-year time window allowed under the Prestigious Scheme.
    The VAT remission system operates differently with respect to 
purchases and sales. For purchases within the State of Gujarat, 
eligible firms (i.e., firms with existing balances under the 
Prestigious Scheme) must pay full tax to the vendor. However, the tax 
paid is credited to the company in the form of an input tax credit to 
be refunded by the State Government. The GOG then debits the refund 
received by the firm against the firm's remaining balance of tax 
credits leftover from the Prestigious Scheme.
    With respect to sales, a company is required to charge sales tax 
from its customers (both local VAT and central sales tax). However, the 
tax collected by the seller does not have to be paid to the State of 
Gujarat, but instead can be retained through a remission order provided 
by the state's sales tax authorities. In such instances, the amount of 
sales tax retained by the firm is credited against the firm's remaining 
balance of tax credits leftover from the Prestigious Scheme.
    Based on various aspects of the description of this system (e.g., 
that the recipient may retain the local and central taxes that it has 
charged on sales of its products), it appears that this tax system is 
not structured as a conventional VAT. This is further confirmed by the 
manner in which eligibility for and the amounts of these remissions 
appear to be linked to the Prestigious Scheme. Because the source of 
the tax remissions received under the system comes from participating 
firms' unused tax credits under the Prestigious Scheme, we preliminary 
determine that these indirect tax remissions constitute a financial 
contribution, in the form of revenue forgone, under section 
771(5)(D)(ii) of the Act and are regionally specific under section 
771(5A)(D)(iv) of the Act. We further preliminarily determine that 
these indirect tax remissions confer a benefit under section 771(5)(E) 
of the Act and 19 CFR 351.510(a)(1) because they enable participating 
firms to pay less indirect taxes than they would have to pay absent the 
system.
    In its questionnaire response, Essar states that during the period 
April 1, 2006, through October 10, 2006, the remittances it obtained 
under this remission system exhausted the balance of tax credits earned 
under the Prestigious program. See pages 13 and 14 of Essar's November 
8, 2007, supplemental questionnaire response, which indicates the 
balance of credits exhausted during the POR. Therefore, for purposes of 
the preliminary results, we are treating the balance of tax credits 
under the Prestigious Program that Essar used to obtain these 
remissions during the POR as the benefit.
    To calculate the net subsidy rate, we divided the benefit amount by 
Essar's total sales. On this basis, we preliminarily calculated an ad 
valorem rate of 0.02 percent for Essar.
    We will consider any additional information and comment that 
parties may want to provide concerning this remission system, and will 
reconsider our findings, as appropriate, for the final results.

C. State Government of Karnataka Programs

    As explained above in the ``Adverse Facts Available'' section, 
supra, the SGOK failed to respond to the Department's new subsidy 
questionnaire regarding alleged subsidy programs pertaining to JSW and 
VMPL. Accordingly, pursuant to section 776(b) of the Act, we find that 
all newly alleged subsidy programs determined to be used by JSW and 
VMPL, as listed below, constitute financial contributions and are 
specific pursuant to sections 771(5)(D) and 771(5A) of the Act, 
respectively.

1. SGOK's New Industrial Policy and Package of Incentives and 
Concessions of 1993 (1993 KIP)

    JSW reported that it received assistance from the SGOK under the 
1993 KIP to construct an integrated steel plant in the state of 
Karnataka. JSW stated that eligibility for the subsidies

[[Page 1594]]

was limited to industries located within designated regions of 
Karnataka. As discussed in ``Adverse Facts Available'' section, supra, 
JSW failed to submit complete information to the Department concerning 
the full extent of assistance the company received from the SGOK under 
the 1993 KIP. In its November 1, 2007, response, JSW submitted a copy 
of the SGOK's November 10, 1994, order that sanctioned infrastructure 
assistance, incentives, and concessions for JSW's steel plant. This 
government document outlines various types of assistance for the 
project including land, power, water, roads, iron ore, coal, limestone/
dolomite, port facilities, training facilities, term loans, an interest 
free unsecured loan, and tax incentives. On November 8, 2007, we issued 
to JSW a supplemental questionnaire requesting information on the 
various types of assistance outlined in the SGOK's approval document. 
JSW failed to submit a response to that questionnaire.
    In its questionnaire responses, JSW, however, did submit limited 
information on the VAT refunds it received during the POR for domestic 
sales made in the state of Karnataka. JSW also provided some limited 
information regarding the amount of tax incentives the company was 
eligible to receive under the 1993 KIP incentives package from the SGOK 
in its new subsidies questionnaire response, which was submitted to the 
Department on November 1, 2007.
    JSW's failure, however, to provide complete information requested 
by the Department has impeded our investigation of the new subsidies 
allegations. JSW also has not provided us with any explanation as to 
why it could not provide the information within the established 
deadlines. Therefore, we preliminarily determine that JSW has failed to 
act to the best of its ability and, in accordance with section 776(b) 
of the Act, we are applying facts available with an adverse inference 
to address these omissions for each type of assistance approved by the 
SGOK, with the exception of the VAT refunds and tax incentives (see 
discussion below for these two assistance programs). As such and as 
explained above in the ``Adverse Facts Available'' section of these 
preliminary results, we are assigning to each of the following sub-
programs the AFA rate of 16.63 percent ad valorem: land, power, water, 
roads, iron ore, coal, limestone/dolomite, port facilities, training 
facilities, term loans, and an interest free unsecured loan. Treatment 
of each type of assistance as a ``sub-program'' (i.e., as a distinct 
program) is consistent with the Department's approach in other 
countervailing duty cases. See, e.g., Carbon and Certain Alloy Steel 
Wire Rod from Turkey; Final Negative Countervailing Duty Determination, 
67 FR 55815 (August 30, 2002), and accompanying Issues and Decision 
Memorandum at ``General Incentives Encouragement Program (GIEP),'' 
under ``Programs Determined To Be Countervailable,'' where the 
Department treated each type of assistance under the GIEP as a separate 
sub-program.
    Concerning tax programs, JSW reported that it received VAT refunds 
from the SGOK during the POR for domestic sales. JSW reported that the 
VAT refunds are only for companies that set up productive units in the 
backward area of Karnataka and are only permitted for products sold 
domestically within Karnataka. See JSW's November 19, 2007, 
Supplemental Questionnaire Response at 19 and 22.
    We preliminarily find that, consistent with 19 CFR 351.510(a)(1), 
the benefit to JSW is the total amount of VAT refunds that the company 
received for the POR. JSW provided to the Department the VAT refunds 
the company received in 2006 in its November 19, 2007, supplemental 
questionnaire response at Table C. We then divided that amount by JSW's 
total sales for 2006. On this basis, we preliminary determine for the 
VAT refund sub-program a rate of 0.83 percent ad valorem for JSW.
    In its November 1, 2007, questionnaire response, JSW also stated 
that it received tax incentives and that the company's tax incentives 
are limited to the capital investment in the fixed assets of the 
project. JSW reported a monetary amount for the fixed assets 
investment. JSW, however, did not explain the extent of tax assistance 
the company received from the SGOK or whether the ``capped'' tax 
incentives were part of or separate from the VAT refunds that the 
company received during the POR. Therefore, as AFA, we preliminarily 
find that in addition to the VAT refunds, JSW received other tax 
incentives during the POR. To calculate the benefit to JSW from these 
other tax incentives, we first divided the total fixed asset investment 
amount by the number of years that JSW can receive tax incentives. We 
then divided the amount apportioned to 2006 by JSW's total sales for 
2006. On this basis, we preliminary determine for the tax incentives 
sub-program a rate of 3.99 percent ad valorem for JSW.
    In the November 8, 2007, supplemental questionnaire covering the 
new subsidies, we asked VMPL, an iron ore supplier that is majority 
owned by JSW, to respond to the questions regarding its receipt of 
assistance under the 1993 KIP. VMPL is a joint venture between JSW and 
MML to supply iron ore to JSW's integrated steel plant. As reported in 
JSW's financial statement, VMPL meets nearly 50 percent of JSW's iron 
ore requirements and ``is pursuing with the Government of Karnataka for 
allocation of additional mining areas to meet the entire iron ore 
requirements of your company.''\24\ (See ``Other SGOK Subsidies'' below 
for more information on VMPL.) VMPL did not submit a response to the 
questionnaire. Therefore, pursuant to section 776(b) of the Act, we 
preliminarily determine that VMPL has failed to act to the best of its 
ability and are applying facts available with an adverse inference to 
address these omissions for each type of assistance provided by the 
SGOK as outlined in JSW's November 10, 1994, approval order.
---------------------------------------------------------------------------

    \24\ See JSW's 2004-2005 financial statement at page 15, which 
was submitted by petitioner in its May 23, 2007, new subsidies 
allegation submission (a public document on the public file in the 
CRU).
---------------------------------------------------------------------------

    Under section 776(b) of the Act and 19 CFR 351.525(b)(6)(vi), we 
preliminarily determine that cross-ownership exists between JSW and 
VMPL based on the nature and extent of the ownership relationship 
between the two. Further, consistent with information on the record 
regarding the nature and extent of the supplier relationship between 
VMPL and JSW, pursuant to section 776(b) of the Act and 19 CFR 
351.525(b)(6)(iv), we preliminarily determine that subsidies received 
by VMPL are attributable to the combined sales of VMPL and JSW.
    Therefore, in order to account for VMPL's failure to respond to the 
Department's questionnaire, pursuant to section 776(b) of the Act, we 
are assigning to JSW: (1) the AFA rate of 16.63 percent ad valorem for 
the following sub-programs: land, power, water, roads, iron ore, coal, 
limestone/dolomite, port facilities, training facilities, term loans, 
and an interest free unsecured loan; (2) the calculated rate of 0.83 
percent ad valorem for the VAT refund sub-program; and (3) the 
calculated rate of 3.99 percent ad valorem for the tax incentives sub-
program.\25\
---------------------------------------------------------------------------

    \25\ Because VMPL did not submit a questionnaire response, we do 
not have the company's sales data for 2006 to combine with JSW's 
sales. Therefore, as AFA, we are using only JSW's total sales as the 
denominator to calculate the rate for the VAT refunds and tax 
incentives sub-programs.
---------------------------------------------------------------------------

2. Other SGOK Subsidies

    Petitioner alleged that JSW received subsidies from the SGOK by 
virtue of JSW's ownership in VMPL, which is also partially owned by 
MML, a SGOK-

[[Page 1595]]

owned company. Specifically, petitioner alleged that (1) MML has not 
received shares in VMPL in return for MML turning over mining sites to 
VMPL; (2) MML has failed to recover pension payments, premium payments, 
and mineral premiums from VMPL, and (3) MML has failed to enforce 
certain pricing agreements it has with VMPL that have resulted in MML 
paying higher prices for iron ore.
    In its November 1, 2007, questionnaire response, JSW reported that 
it owns 70 percent of VMPL and MML owns the remaining 30 percent. 
Concerning petitioner's allegations, JSW stated that MML received its 
shares in VMPL and payment against the balance of premiums owed by 
VMPL. JSW stated that the Department's questions regarding failure of 
MML to enforce pricing arrangements were not applicable.
    In the November 8, 2007, supplemental questionnaire, we asked JSW 
to submit documentation to substantiate its statements that MML 
received shares in VMPL and received all payments due from VMPL. We 
also instructed VMPL to submit a questionnaire response covering the 
SGOK's incentives and concessions packages (see discussion, infra). JSW 
did not submit a response to the November 8, 2007, supplemental 
questionnaire, nor did VMPL respond to its questionnaire. JSW's failure 
to provide complete information requested by the Department has impeded 
our investigation of the new subsidies allegations. JSW also has not 
provided us with any explanation as to why it could not provide the 
information within the established deadlines. Therefore, because we 
preliminarily determine that JSW has failed to act to the best of its 
ability, pursuant to section 776(b) of the Act, and find that subsidies 
to VMPL are attributable to JSW, we are applying facts available with 
an adverse inference to address these omissions. As such, we are 
assigning to each of the following sub-programs the AFA rate of 16.63 
percent ad valorem: (1) MML's receipt of VMPL shares, (2) MML's receipt 
of premium payments from VMPL, and (3) MML's Failure to Enforce Pricing 
Arrangements.

3. SGOK's New Industrial Policy and Package of Incentives and 
Concessions of 1996

    VMPL did not submit a response to the November 8, 2007, new 
subsidies supplemental questionnaire covering its use of the SGOK's 
1996 incentives and concessions package. Therefore, we preliminarily 
determine that VMPL/JSW has failed to act to the best of its ability 
and, pursuant to section 776(b) of the Act, we are applying facts 
available with an adverse inference to address this failure to respond. 
Therefore, we are assigning to this program the AFA rate of 16.63 
percent ad valorem.

4. SGOK's New Industrial Policy and Package of Incentives and 
Concessions of 2001

    VMPL did not submit a response to the November 8, 2007, new 
subsidies supplemental questionnaire covering its use of the SGOK's 
2001 incentives and concessions package. Therefore, we preliminarily 
determine that VMPL/JSW has failed to act to the best of its ability 
and, pursuant to section 776(b) of the Act, we are applying facts 
available with an adverse inference to address this failure to respond. 
Therefore, we are assigning to this program the AFA rate of 16.63 
percent ad valorem.

5. SGOK's New Industrial Policy and Package of Incentives and 
Concessions of 2006

    VMPL did not submit a response to the November 8, 2007, new 
subsidies supplemental questionnaire covering its use of the SGOK's 
2006 incentives and concessions package. Therefore, we preliminarily 
determine that VMPL/JSW has failed to act to the best of its ability 
and, pursuant to section 776(b) of the Act, we are applying facts 
available with an adverse inference to address this failure to respond. 
Therefore, we are assigning to this program the AFA rate of 16.63 
percent ad valorem.

D. State Government of Maharashstra Programs

1. Sales Tax Program

    Under the Maharastra Package Scheme of Incentives and the 
Maharastra New Package Scheme of Incentives, the Government of 
Maharastra (GOM) offered tax incentives - including sales tax 
exemptions, sales tax deferrals, VAT tax refunds, and interest-free 
unsecured loans - to companies that located or invested in certain 
developing areas in the State of Maharastra.
    Ispat reported that, through the Maharastra Package Scheme of 
Incentives of 1983 and the Maharastra Package Scheme of Incentive of 
1988, Ispat was permitted to retain as an interest-free loan an amount 
equal to the amount of sales taxes incurred by its Kalmeshwar Complex 
that was otherwise payable to the GOM. For its Dolvi Plant, under the 
Maharashstra New Package Scheme of Incentives of 1993 Ispat was 
entitled to receive an exemption of sales taxes payable on raw material 
purchases, but, with GOM's introduction of a VAT system on April 1, 
2005, the exemption of sales taxes on purchases was no longer 
available. Ispat reported that, with regard to the Dolvi division, 
Ispat is eligible for an exemption of sales taxes on sales and that it 
is also entitled to VAT refunds. Ispat stated that, with regard to the 
Dolvi division, Ispat has been eligible for remission of sales taxes 
since August 6, 1998, and will remain eligible until August 5, 2012. 
Finally, Ispat reported that deferral of sales tax on purchases is not 
available under the program, but deferral of sales tax on sales is 
available. Ispat stated that, as of May 1, 2006, the company shifted 
from claiming sales tax exemptions to claiming sales tax deferrals. 
Ispat stated that, instead of immediately paying the GOM the sales 
taxes it collects, the company retains the sales taxes it collects on 
behalf of the GOM for ten years before being required to submit the 
deferred sales taxes to the GOM in equal installments over five years.
    In the Final Determination of PET Resin Investigation, the 
Department determined that the purchases under the Prestigious Scheme 
resulted in companies not paying the state sales tax otherwise due, and 
that the program provided a countervailable subsidy. See the ``State of 
Gujarat (SOG) Sales Tax Incentive Scheme'' section of the Final 
Determination of PET Resin Investigation Decision Memorandum. 
Consistent with our findings in the Final Determination of PET Resin, 
we preliminarily determine that this program is countervailable. We 
preliminarily determine that the Maharstra Package Scheme of Incentives 
program is limited to only those companies that make an investment in a 
specified developing area and therefore, it is specific under section 
771(5A)(D)(iv) of the Act. We also preliminarily determine that the GOM 
provides a financial contribution under section 771(5)(D)(ii) of the 
Act by foregoing the collection of sales tax revenue and, in the case 
of sales tax deferrals, in the form of uncollected interest on the 
deferred sales taxes. See 19 CFR 351.510(a)(2). We preliminarily 
determine that Ispat receives a benefit under section 771(5)(E) of the 
Act: (1) in the amount of sales tax that it does not pay; (2) in the 
case of sales tax deferrals, in the amount of interest otherwise due; 
and (3) in the case of sales tax loans, in the form of interest-free 
loans.
    In the case of an exemption of an indirect tax, the Department 
considers the benefit as being received at the time the recipient firm 
otherwise would be required to pay the indirect tax. See 19

[[Page 1596]]

CFR 351.510(b)(1). We preliminarily determine that the date that Ispat 
otherwise would be required to pay the exempted taxes corresponds to 
the date of the annual state tax return Ispat filed during the POR. 
Because Ispat has not provided a copy of its state tax return filed in 
the POR, we are unable to calculate the benefit for sales tax 
exemptions that may have been claimed by Ispat during the POR. Prior to 
issuing the final results, we intend to collect a copy of Ispat's state 
tax return and additional information regarding Ispat's sales tax 
exemptions.
    Ispat provided a breakdown of its VAT refunds pertaining to the 
period April 2005 to the end of the POR. Because Ispat did not provide 
detailed information as to when it applied for and received these 
refunds, we calculated the benefit by summing all of the VAT refunds 
Ispat reported having received during the POR. Prior to issuing the 
final results, we intend to collect additional information regarding 
these VAT refunds.
    Regarding Ispat's deferrals of indirect taxes, a benefit exists to 
the extent that the appropriate interest charges are not collected. See 
19 CFR 351.510(2)(a)(2). Ispat provided a monthly breakdown of its 
sales tax deferrals. Using these data, we calculated the monthly 
benefit by multiplying the monthly amount of deferred tax by the days 
outstanding in the POR by the benchmark interest rate. We used the long 
term 2006 benchmark interest rate because Ispat is not required to 
repay these deferral sales tax amounts for 10 to 15 years.
    Regarding interest free sales tax loans, Schedule 4 of Ispat's 
Annual Report contains an entry for the amount of interest-free sales 
tax loans outstanding as of March 31, 2006. Because Ispat did not 
provide more specific data, we calculated the benefit by treating this 
amount as the amount of interest-free tax loan outstanding at the 
beginning of 2006 and multiplying it by the benchmark interest rate. As 
explained in the ``Subsidies Valuation Section'' above, because Ispat 
did not have comparable, commercial loans for 2006, we used the average 
interest rate in 2006 for India's PLR, as reported by the RBI. We used 
a long-term benchmark interest rate because Ispat reported that is not 
required to repay the unsecured sales tax loans for 10 to 15 years.
    Ispat claims that the provision in the Maharastra Package Scheme of 
Incentives which allows for exemptions of sales taxes on purchases was 
terminated on March 31, 2005, and that a substitute program has not 
been instituted. On this basis, Ispat requests that the Department take 
a program-wide change into consideration when establishing the cash 
deposit rate applicable to the Maharastra Package Scheme of Incentives. 
We note that 19 CFR 351.526(d) provides that the Department will not 
adjust the cash deposit rate if the program-wide change consists of a 
terminated program and: (1) the Department determines that residual 
benefits may continue to be bestowed under the terminated program, or 
(2) the Department determines that a substitute program for the 
terminated program has been introduced and the Department is not able 
to measure the amount of countervailable subsidies provided under the 
substitute program. In this review, the GOM has not provided the 
required information regarding residual benefits and successor 
programs, as discussed under 19 CFR 351.526(d).
    To calculate the net subsidy rate for this program, we summed the 
various benefit amounts received by Ispat under each provision of the 
program and divided the total benefit amount for the POR by Ispat's 
total sales during the POR. On this basis, we preliminarily calculate 
an ad valorem program rate of 1.25 percent for Ispat.

2. Electricity Duty Exemption under the Package Scheme of Incentives 
for 1993

    Ispat reported that, under the Package Scheme of Incentives for 
1993, the GOM provides exemptions of electricity duties for ``Mega'' 
projects located in specified developing regions of the state. Ispat 
reported that, because Ispat's Dolvi plant qualified as a Mega project, 
Ispat holds eligibility certificates under the Maharastra New Package 
Scheme of Incentives of 1993. Under this program, Ispat received 
electricity duty exemptions on several of the types of electricity 
charges by the Maharastra State Electricity Distribution Co. Ltd.
    We preliminarily determine that the Maharstra Package Scheme of 
Incentives program is limited to only those companies that make an 
investment in a specified developing area and therefore, it is specific 
under section 771(5A)(D)(iv) of the Act. We also preliminarily 
determine that the GOM provides a financial contribution under section 
771(5)(D)(ii) of the Act by foregoing the collection of electricity 
duty revenue. We preliminarily determine that Ispat receives a benefit 
under section 771(5)(E) of the Act in the amount of electricity duties 
that it does not pay.
    To calculate the benefit received by Ispat during the POR under 
this program, we summed the monthly value of electricity charges that 
were eligible for the duty exemption and multiplied these totals by the 
``industrial'' electricity duty rate of 6 percent. We then divided this 
result by the company's total sales during the POR. On this basis, we 
preliminarily calculate an ad valorem program rate of 0.59 percent for 
Ispat.

II. Program Preliminary Found Not To Provide Countervailable Benefits 
in the POR

Duty Free Replenishment Certificate (DFRC) Scheme

    The DFRC scheme was introduced by the GOI in 2001 and is 
administered by the DGFT. The DFRC is a duty replenishment scheme that 
is available to exporters for the subsequent import of inputs used in 
the manufacture of goods without payment of basic customs duty. In 
order to receive a license, which entitles the recipient subsequently 
to import duty free certain inputs used in the production of the 
exported product, as identified in a SION, within the following 24 
months, a company must: (1) export manufactured products listed in the 
GOI's export policy book and against which there is a SION for inputs 
required in the manufacture of the export product based on quantity; 
and (2) have realized the payment of export proceeds in the form of 
convertible foreign currency. The application must be filed within six 
months of the realization of the profits. DFRC licenses are 
transferrable, yet the transferee is limited to importing only those 
products and in the quantities specified on the license.
    Although 19 CFR 351.519(b)(2) provides that the Secretary will 
normally consider any benefit from a duty drawback or exemption program 
as having been received as of the date of exportation, we preliminary 
find that an exception to this normal practice is warranted here in 
view of the unique manner in which this program operates. Specifically, 
a company may not submit an application for a DFRC license until the 
proceeds of the sale are realized. The license, once granted, specifies 
the quantity of the particular inputs that the bearer may subsequently 
import duty free. In the Final Results of First HRC Review, we noted 
that the benefits from another duty exemption program, the DEPS, were 
conferred as of the date of exportation of the shipment because it is 
at that point that ``the amount of the benefit is known by the 
exporter.'' See Final Results of First HRC Review Decision Memorandum 
at II.A.4 ``Duty Entitlement Passbook Scheme.'' However, in the case of 
the DFRC, the company does not know at the time of

[[Page 1597]]

export the value of the duty exemption that it will ultimately receive. 
It only knows the quantity of the inputs it will likely be able to 
import duty free if its application for a DFRC license is granted. 
Unlike the DEPS, under the DFRC, the respondent will only know the 
total value of the duty exemption when it subsequently uses that 
license to import the specified products duty free or sells it. 
Therefore, we preliminarily determine that the date of receipt is 
linked to when the company uses the certificate to import an input duty 
free or, in the case in which the company sells the certificate, the 
date of sale. This approach is consistent with the Department's 
approach to other similar types of programs in India. See, e.g., the 
``Duty Entitlement Passbook Scheme (DEPS),'' section of the Final 
Determination of Lined Paper Investigation Decision Memorandum.
    During the POR, no companies reported importing using a DFRC 
license or exporting against a DFRC license. However, Tata reported 
selling DFRC licenses during the POR. The Department has previously 
determined that the sale of quantity-based import licenses confers a 
countervailable export subsidy. See, e.g., Final Determination of CTL 
Plate Investigation, 64 FR 73131, 73134; Certain Iron-Metal Castings 
from India: Final Results of Countervailing Duty Administrative Review, 
63 FR 64050 (Nov. 18, 1998); and Certain Iron-Metal Castings from 
India: Final Results of Countervailing Duty Administrative Review, 62 
FR 32297, 32298 (June 13, 1997), in which the Department found the sale 
of quantity-based licenses under the ALP countervailable. Therefore, in 
accordance with section 771(5A)(B) of the Act, we determine that the 
sale of DFRC licenses is an export subsidy and that a financial 
contribution is provided, under section 771 5(D)(ii) of the Act, in the 
form of the revenue foregone. We further find that the sales of the 
licenses conferred a benefit under section 771 (5)(E) of the Act.
    However, Tata further reported that all of the DFRC licenses sold 
during the POR were tied to non-subject merchandise. Because the 
receipt of DFRC licenses are tied to specific export sales, Tata's 
indication in its questionnaire response that its sales of DFRC 
licenses during the POR are tied to non-subject merchandise is 
plausible. Therefore, for purposes of these preliminary results, we 
find that Tata's use of this program was tied to non-subject 
merchandise.

III. Program for Which More Information is Required

Status Certificate Program

    India's Status Certificate Program is detailed under paragraph 3.5 
of its Foreign Trade Policy Handbook. This program details the 
following privileges provided to exporters, depending on their export 
performance for the current year, plus the preceding three years:
    i). License/certificate/permissions and Customs clearances for both 
imports and exports on self-declaration basis;
    ii). Fixation of Input-Output norms on priority within 60 days;
    iii). Exemption from compulsory negotiation of documents through 
banks. The remittance, however, would continue to be received through 
banking channels;
    iv). 100 percent retention of foreign exchange in EEFC account;
    v). Enhancement in normal repatriation period from 180 days to 360 
days;
    vi). Entitlement for consideration under the Target Plus Scheme; 
and
    vii). Exemption from furnishing of Bank Guarantee in Schemes under 
this Policy.
    Tata and JSW indicated that they did not use the Status Certificate 
program during the POR. However, Ispat and Essar indicated that they 
participated in the program. On December 7, 2007, the Department 
requested additional information from Ispat and Essar regarding their 
use of the program. In particular, we inquired the extent to which 
Ispat and Essar used the provision related to foreign currency 
retention under the Status Certificate program during the POR. In 
Essar's December 12, 2007, questionnaire response, it stated that it 
did not use the currency retention program. In its December 13, 2007, 
questionnaire response, Ispat indicated that it used the program to 
extend the repatriation period of its foreign currency earnings beyond 
180 days.
    At this time, we do not have sufficient information from parties to 
determine whether this extension of the time period to repatriate 
foreign currency earnings under the Status Certificate Program is a 
countervailable subsidy. We intend to seek further information and 
issue an interim analysis describing our preliminary findings with 
respect to this program before the final results of review so that 
parties will have to opportunity to comment on our findings.

VI. Programs Preliminarily Determined Not To Be Used

A. GOI Programs

    1. Export Processing Zones and Export Oriented Units
    2. Export Processing Zones
    3. Income Tax Exemption Scheme (Sections 10A, 10B, and 80HHC)
    4. Market Development Assistance
    5. Market Access Initiative
    6. Exemption of Export Credit from Interest Taxes
    7. Long-Term Loans from the GOI
    8. Special Economic Zone Act of 2005
    a. Duty free import/domestic procurement of goods and service for 
development, operation, and maintenance of SEZ units.
    b. Exemption from excise duties on goods (i.e., machinery and 
capital goods) ``brought from the Domestic Tariff Area'' (defined as 
the ``whole of India'' excluding SEZs) for use by an enterprise in the 
SEZ.
    c. Drawback on goods brought or services provided from the Domestic 
Tariff Area into a SEZ, or services provided in a SEZ by service 
providers located outside India.
    d. 100 percent exemption from income taxes on export income from 
the first 5 years of operation, 50 percent for the next 5 years, and a 
further 50 percent exemption on export income reinvested in India for 
an additional 5 years.
    e. Exemption from the Central Sales Tax.
    f. Exemption from the national Service Tax.

B. State Government of Andhra Pradesh Programs- Grants Under the 
Industrial Investment Promotion Policy of 2005-2010

    1. 25 percent reimbursement of cost of land in industrial estates 
and industrial development areas.
    2. Reimbursement of power at the rate of Rs. 0.75 ``per unit'' for 
the period beginning April 1, 2005, through March 31, 2006 and for the 
four years thereafter to be determined by the Government of Andhra 
Pradesh (GOAP).
    3. 50 percent subsidy for expenses incurred for quality 
certification up to RS. 100 lakhs.
    4. 25 percent subsidy on ``cleaner production measures'' up to Rs. 
5 lakhs.
    5. 50 percent subsidy on expenses incurred in patent registration, 
up to Rs. 5 lakhs.
    6. 100 percent reimbursement of stamp duty and transfer duty paid 
for the purchase of land and

[[Page 1598]]

buildings and the obtaining of financial deeds and mortgages.
    7. A grant of 25 percent of the tax paid to GAAP, which is applied 
as a credit against the tax owed the following year, for a period of 
five years form the date of commencement of production.
    8. Exemption form the GAAP Non-agricultural Land Assessment (NALA).
    9. Provision of ``infrastructure'' for industries located more than 
10 kilometers from existing industrial estates or industrial 
development areas.
    10. Guaranteed ``stable prices of municipal water for 3 years for 
industrial use'' and reservation of 10% of water for industrial use for 
existing and future projects.

C. State Government of Chhattusgarh Programs- Industrial Policy 2004-
2009

    1. A direct subsidy of 35 percent to total capital cost for the 
project, up to a maximum amount equivalent to the amount of commercial 
tax/central sales tax paid in a seven year period.
    2. A direct subsidy of 40 percent toward total interest paid for a 
period of 5 years (up to Rs. Lakh per year) on loans and working 
capital for upgrades in technology.
    3. Reimbursement of 50 percent of expenses (up to Rs. 75,000) 
incurred for quality certification.
    4. Reimbursement of 50 percent of expenses (up to 5 lakh) for 
obtaining patents.
    5. Total exemption from electricity duties for a period of 15 years 
form the date of commencement of commercial production.
    6. Exemption from stamp duty on deeds executed for purchase or 
lease of land and buildings and deeds relating to loans and advances to 
be taken by the company for a period of three years from the date of 
registration.
    7. Exemption from payment of ``entry tax'' for 7 years (excluding 
minerals obtained from mining in the state).
    8. 50 percent reduction of the service charges for acquisition of 
private land by Chhattisgarh Industrial Development Corporation for use 
by the company.
    9. Allotment of land in industrial areas at a discount up to 100 
percent.

D. State Government of Gujarat Programs

    1. Gujarat Special Economic Zone (SEZ) Act
    a. Stamp duty and registration fees for land transfers, loan 
agreements, credit deeds, and mortgages.
    b. Sales tax, purchase tax, and other taxes payable on sales and 
transactions.
    c. Sales and other state taxes on purchases of inputs (both goods 
and services) for the SEZ or a Unit within the SEZ.
    2. Captive Port Facilities
    a. Discount on Gujarat wharfage charges.
    b. Credit for the cost of the capital (including interest) to 
construct the port facilities, which is then applied as an offset to 
the wharfage charges due Gujarat on cargo shipped through the captive 
jetty.

E. State Government of Jharkhand Programs

    1. Grants and Tax Exemptions under the State Industrial Policy of 
2001
    2. Subsidies for Mega Projects under the JSIP of 2001

F. State Government of Maharashstra Programs

    1. Refunds of Octroi Under the PSI of 1993, Maharastra Industrial 
Policy of 2001, and Maharastra Industrial Policy of 2006.
    2. Infrastructure Assistance for Mega Projects.
    3. Land for Less than Adequate Remuneration.
    4. Loan Guarantees Based on Octroi Refunds by the SGM.
    5. Investment Subsidy.

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we have calculated an 
individual subsidy rate for each reviewed company for the period 
January 1, 2006, through December 31, 2006. These rates are summarized 
in the table below:

------------------------------------------------------------------------
                                                           Total Net
                       Company                          Countervailable
                                                         Subsidy Rate
------------------------------------------------------------------------
Essar Steel Ltd.....................................    12.87 percent ad
                                                                 valorem
Ispat Industries Ltd................................    13.42 percent ad
                                                                 valorem
JSW Steel Ltd.......................................   505.20 percent ad
                                                                 valorem
Tata Steel Ltd......................................    29.21 percent ad
                                                                 valorem
------------------------------------------------------------------------

    If the final results of this review remain the same as these 
preliminary results, the Department intends to issue assessment 
instructions to U.S. Customs and Border Protection (CBP) 15 days after 
the date of publication of the final results of review. We will 
instruct CBP to collect cash deposits for each respondent at the 
countervailing duty rate indicated above of the f.o.b. invoice price on 
all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of the 
final results of this review. We will also instruct CBP to continue to 
collect cash deposits for non-reviewed companies at the most recent 
company-specific or country-wide rate applicable to the company.
    These deposit requirements, when imposed, shall remain in effect 
until further notice.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of the public 
announcement of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. The Department will notify interest parties of the briefing 
schedule after the date of publication of this notice. Rebuttal briefs, 
limited to arguments raised in case briefs, must be submitted no later 
than five days after the time limit for filing case briefs, unless 
otherwise specified by the Department, pursuant to 19 CFR 
351.309(d)(1). Parties who submit argument in this proceeding are 
requested to submit with the argument: (1) a statement of the issues, 
and (2) a brief summary of the argument. Parties submitting case and/or 
rebuttal briefs are requested to provide the Department copies of the 
public version on disk. Case and rebuttal briefs must be served on 
interested parties in accordance with 19 CFR 351.303(f). Also, pursuant 
to 19 CFR 351.310(c), within 30 days of the date of publication of this 
notice, interested parties may request a public hearing on arguments to 
be raised in the case and rebuttal briefs. Unless the Secretary 
specifies otherwise, the hearing, if requested, will be held two days 
after the date for submission of rebuttal briefs, that is, 37 days 
after the date of publication of these preliminary results.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 351.309(c)(ii), are due. See 19 CFR 
351.305(b)(3). The Department will publish the final results of this

[[Page 1599]]

administrative review, including the results of its analysis of 
arguments made in any case or rebuttal briefs.
    These preliminary results of review are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 
351.221(b)(4).

    Dated: December 31, 2007.
Susan H. Kuhbach,
Acting Assistant Secretary for Import Administration.
[FR Doc. E8-179 Filed 1-8-08; 8:45 am]
BILLING CODE 3510-DS-S