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Certain Hot-Rolled Carbon Steel Flat Products from India: Final Results and Partial Rescission of Countervailing Duty Administrative Review

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Import Administration, International Trade Administration, Department of Commerce.


On December 30, 2008, the U.S. Department of Commerce (the Department) published in the Federal Register its preliminary results of the administrative review of the countervailing duty (CVD) order on certain hot-rolled carbon steel flat products (hot-rolled carbon steel) from India for the period of review (POR) January 1, 2007, through December 31, 2007. See Certain Hot-Rolled Carbon Steel Flat Products from India: Notice of Preliminary Results and Partial Rescission of Countervailing Duty Administrative Review; 73 FR 79791 (December 30, 2008) (Preliminary Results). We preliminarily found that Essar Steel Ltd. (Essar) received countervailable subsidies during the POR. We received comments on our Preliminary Rresults from the Government of India (GOI), petitioners, and the respondent company, Essar.1 The final results are listed in the section “Final Results of Review” below.

We also preliminarily rescinded the administrative review regarding Ispat Industries Limited (Ispat), JSW Steel Limited (JSW), and Tata Steel Limited (Tata) due to the fact that they had no shipments during the POR. We received no comments on the partial rescission of administrative review for Ispat, JSW, and Tata and, therefore, we hereby rescind the administrative review with regard to these firms.


May 6, 2009.

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Gayle Longest at (202) 482-3338, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Ave, NW, Washington, DC 20230.

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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 Order: Certain Hot-Rolled Carbon Steel Flat Products from India, 66 FR 60198 (December 3, 2001). On December 30, 2009, the Department published in the Federal Register its Preliminary Result s of the administrative review of this order for the period January 1, 2007, through December 31, 2007. See Preliminary Results, 73 FR 79791. In accordance with 19 CFR 351.213(b), this administrative review covers Essar, a producer and exporter of subject merchandise.

On January 21, 2009, we issued supplemental questionnaires to Essar and the GOI. We received responses from Essar and the GOI on January 28, 2009.

In the Preliminary Results, we invited interested parties to submit briefs or request a hearing. On January 29, 2009, we received comments from the GOI. In addition, on February 6, 2009, we received comments from Essar as well as petitioners. On February 18, 2009, we received rebuttal comments from Essar and petitioners. We received a request for a hearing from Essar and the GOI on February 9, 2009. On March 27, 2009, we held a public hearing in room 7870 of the Commerce Building. Parties can Start Printed Page 20924find a transcript of the hearing on file in the central records unit (CRU), room 1117 of the main Department building.

Scope of Order

The merchandise subject to this order is certain hot-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, or 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

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, 7208.53.00.00, 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.

Period of Review

The POR for which we are measuring subsidies is from January 1, 2007, through December 31, 2007.

Analysis of Comments

On January 29, 2009 the GOI filed comments. On February 6, 2009, Essar and petitioners filed comments. On February 18, 2009, Essar and petitioners filed rebuttal comments. All issues in the respondents' and petitioners' case and rebuttal briefs are addressed in the accompanying Issues and Decision Memorandum for the Countervailing Duty Administrative Review on Certain Hot-Rolled Carbon Steel Flat Products from India (Decision Memorandum), which is hereby adopted by this notice. A listing of the issues that parties raised and to which we have responded is attached to this notice as Appendix I. Parties can find a complete discussion of the issues raised in this review and the corresponding recommendations in this public memorandum, which is on file in the CRU of the main commerce building. In addition, a complete version of the Decision Memorandum can be accessed directly on the World Wide Web at​frn.

The paper copy and the electronic version of the Decision Memorandum are identical in content.

Final Results of Review

After reviewing comments from all parties, we have made adjustments to our calculations as explained in our Decision Memorandum. Consistent with the Preliminary Results, we find that Essar received countervailable subsidies during the POR.

CompanyTotal Net Countervailable Subsidy Rate
Essar Steel Ltd76.88 percent ad valorem

Assessment Rates/Cash Deposits

The Department intends to issue assessment instructions to U.S. Customs and Border Protection (CBP) 15 days after the date of publication of these final results of review to liquidate shipments of subject merchandise by Essar entered, or withdrawn form warehouse, for consumption on or after January 1, 2007, through December 31, Start Printed Page 209252007, at the ad valorem rate listed above. We will also instruct CBP to collect cash deposits for the respondent at the countervailing duty rate indicated above on all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of these final results of review.

For all non-reviewed companies, the Department will instruct CBP to assess countervailing duties at the cash deposit rates in effect at the time of entry, for entries between January 1, 2007, and December 31, 2007. The cash deposit rates for all companies not covered by this review are not changed by the results of this review.

Return or Destruction of Proprietary Information

This notice serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act of 1930, as amended.

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Dated: April 29, 2009.

Ronald K. Lorentzen,

Acting Assistant Secretary for Import Administration.

End Signature

Appendix I Issues in Decision Memorandum

I. Partial Rescission of Review

II. Adverse Facts Available (AFA)

A. The GOI

B. Essar

1. SGOC's Industrial Policy


III. Subsidies Valuation Information

A. Benchmarks for Loans and Discount Rates

B. Use of Uncreditworthy Benchmarks for Essar

C. Allocation Period

IV. Analysis of Programs

A. Programs Administered by the Government of India

1. Pre- and Post-Shipment Export Financing

2. Export Promotion Capital Goods Scheme (EPCGS)

3. Sale of High-Grade Iron Ore for LTAR

4. SEZ Act

a. Duty free import/domestic procurement of goods and services for development, operation, and maintenance of SEZ units program b. Exemption from excise duties on goods machinery and capital goods brought from the Domestic Tariff Area for use by an enterprise in the SEZ c. Exemption from the Central Sales Tax (CST) d. Exemption from the National Service Tax

B. Programs Administered by the State Government of Gujarat

1. SGOG Special Economic Zone Act (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. Wharfage Fees Paid Under the SGOG's Captive Port Facilities Program

C. Programs Administered by the SGOC

SGOC Industrial Policy 2004-2009

a. 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 b. 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 c. Reimbursement of 50 percent of expenses (up to Rs. 75,000) incurred for quality certification d. Reimbursement of 50 percent of expenses (up to 5 lakh) for obtaining patents e. Total exemption from electricity duties for a period of 15 years from the date of commencement of commercial production f. 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 g. Exemption from payment of “entry tax” for 7 years (excluding minerals obtained from mining in the state) h. 50 percent reduction of the service charges for acquisition of private land by Chhattisgarh Industrial Development Corporation for use by the company i. Allotment of land in industrial areas at a discount up to 100 percent

D. Programs Found Not To Confer a Countervailable Benefit During the POR

1.Own Your Own Wagon Scheme

2. Duty Free Replenishment Certificate (DFRC) Scheme

E. Programs Determined Not To Be Used

1. GOI Programs

a. Advance License Program (ALP) b. Duty Entitlement Passbook Scheme (DEPS) c. Export Processing Zones (EPZ) and Export Oriented Unit (EOU) d. Target Plus Scheme (TPS) e. Income Tax Exemption Scheme (Sections 10A, 10B, and 80 HHC) f. Market Development Assistance (MDA) g. Status Certificate Program h. Market Access Initiative i. Loan Guarantees from the GOI j. Steel Development Fund (SDF) Loans k. Exemption of Export Credit from Interest Taxes l. Captive Mining of Iron Ore m. Captive Mining of Coal n. Duty Free Import Authorization Scheme (DFIA) o. Wagon Investment Scheme (WIS) p. 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 q. 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

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

a. 25 percent reimbursement of cost of land in industrial estates and industrial development areas b. 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) c. 50 percent subsidy for expenses incurred for quality certification up to RS. 100 lakhs d. 25 percent subsidy on “cleaner production measures” up to Rs. 5 lakhs e. 50 percent subsidy on expenses incurred in patent registration, up Start Printed Page 20926to Rs. 5 lakhs f. 100 percent reimbursement of stamp duty and transfer duty paid for the purchase of land and buildings and the obtaining of financial deeds and mortgages g. 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 from the date of commencement of production h. Exemption from the GAAP Non-agricultural Land Assessment (NALA) i. Provision of “infrastructure” for industries located more than 10 kilometers from existing industrial estates or industrial development areas j. 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

3. State Government of Gujarat Programs

a. State Government of Gujarat (SGOG) Provided Tax Incentives (1). Sales Tax Exemptions of Purchases of Goods During the POR (2). Sales Tax Deferrals on Purchases of Good from Prior Years (As Well as Deferrals Granted During the POR) which Were Outstanding During the POR) (3). Accounting Treatment of Purchases (4). Value Added Tax (VAT) Program Established on April 1, 2006 b. Captive Port Facilities

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

4. State Government of Jharkhand Programs

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

5. State Government of Maharashtra Programs

a. Refunds of Octroi Under the PSI of 1993, Maharashtra Industrial Policy of 2001, and Maharashtra Industrial Policy of 2006 b. Infrastructure Assistance for Mega Projects c. Land for Less than Adequate Remuneration d. Loan Guarantees Based on Octroi Refunds by the SGM. e. Investment Subsidy

V. Analysis of Comments

Comment 1: Whether the Failure of the Government of India (GOI) and the Indian State Governments (ISGs) to Respond to the Department's Questions Warrants Application of Adverse Inferences with Respect to Subsidy Programs Essar Claims It Did Not Use

Comment 2: Whether Essar Received Benefits Under the Industrial Policy of the State Government of Chhattisgarh (SGOC)

Comment 3: Whether Essar Received Benefits Under the Industrial Policy of the State Government of Andhra Pradesh (SGOAP)

Comment 4: Whether Essar Received Benefits Under the Captive Port Facilities Program of the State Government of Gujarat (SGOG)

Comment 5: Whether Essar Received Benefits Under the GOI's Special Economic Zone (Act of 2005 (SEZ Act)

Comment 6: Whether the Department Inadvertently Failed to Include Certain Export Promotion Capital Goods Scheme (EPCGS) Licenses in the Benefit Calculation for the Preliminary Results

Comment 7: Whether the Department Should Adjust the EPCGS License Application Fees Reported by Essar

Comment 8: Whether It Was Appropriate to Apply Adverse Inferences With Regard to Certain of Essar's EPCGS Licenses

Comment 9: Whether the Department Erred In Calculating Benefits Conferred Under the Pre-Shipment Export Financing Program

Comment 10: Whether the National Mineral Development Corporation (NMDC) is a Government Authority Capable of Providing a Financial Contribution

Comment 11: Whether There is a Viable In-Country Benchmark Price For Use in the Benefit Calculation of the Provision of High-Grade Iron Ore DR-CLO Lumps (lumps) and Iron Ore Fines (Fines) for Less Than Adequate Remuneration (LTAR) Calculation, and If So, How It Should Be Calculated

Comment 12: Whether the Department Used Comparable Benchmark Prices For Use in the Benefit Calculations of the Provision of Lumps and Fines for LTAR Program

Comment 13: Whether the Department's Inclusion of Freight Costs in the Fines and Lumps Benchmarks Produced a Distorted Result

Comment 14: Whether the Department Should Make Certain Adjustments to the Benchmark Used in the Benefit Calculation of the Provision of lumps and fines and for LTAR Program

VI. Total Net Subsidy Rate

VII. Recommendation

End Supplemental Information


1.  Petitioners are the United States Steel Corporation and Nucor Corporation (collectively, petitioners).

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[FR Doc. E9-10496 Filed 5-5-09; 8:45 am]