Certain Hot-Rolled Carbon Steel Flat Products from India: Notice of Preliminary Results of Countervailing Duty Administrative Review, 1578-1599 [E8-179]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 6 (Wednesday, January 9, 2008)]
[Notices]
[Pages 1578-1599]
From the Federal Register Online via the Government Printing 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.
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    \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.
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    \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