Carbazole Violet Pigment 23 From India: Preliminary Results of Countervailing Duty Administrative Review, 977-981 [2010-27]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 75, Number 4 (Thursday, January 7, 2010)]
[Notices]
[Pages 977-981]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[C-533-839]


Carbazole Violet Pigment 23 From India: 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 Alpanil Industries, Ltd. (Alpanil) under the 
countervailing duty order on carbazole violet pigment 23 (CVP-23) from 
India for the period January 1, 2007, through December 31, 2007. We 
preliminarily determine that subsidies are being provided to Alpanil on 
the production and export of CVP-23 from India. See ``Preliminary 
Results of Administrative Review'' section, below. If the final results 
remain the same as the preliminary results of this review, we will 
instruct U.S. Customs and Border Protection (CBP) to assess 
countervailing duties. Interested parties are invited to comment on the 
preliminary results of this administrative review. See the ``Public 
Comment'' section below.

DATES: Effective Date: January 7, 2010.

FOR FURTHER INFORMATION CONTACT: Elfi Blum or Myrna Lobo, AD/CVD 
Operations, Office 6, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0197 or (202) 482-2371, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On December 29, 2004, the Department published in the Federal 
Register the countervailing duty (CVD) order on CVP-23 from India. See 
Notice of Countervailing Duty Order: Carbazole Violet Pigment 23 from 
India, 69 FR 77995 (December 29, 2004) (CVP-23 Order). On December 1, 
2008, the Department published in the Federal Register a notice of 
opportunity to request an administrative review of this order. See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 73 FR 
72764 (December 1, 2008).
    On December 30, 2008, the Department received a timely request to 
conduct an administrative review from Alpanil, an Indian producer and

[[Page 978]]

exporter of subject merchandise. On December 31, 2008, the Department 
received a timely request from the Government of India (GOI) also on 
behalf of Alpanil to conduct an administrative review. On February 2, 
2009, the Department initiated an administrative review of the CVD 
Order on CVP-23 from India covering Alpanil for the period January 1, 
2007, through December 1, 2007. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Requests for Revocation 
in Part, 74 FR 5821 (February 2, 2009). On February 24, 2009, domestic 
interested parties Nation Ford Chemical Company and Sun Chemical 
Corporation, who were petitioners in the original investigation, 
entered an appearance (petitioners).
    The Department issued a questionnaire to Alpanil and the GOI on 
February 17, 2009. On March 23, 2009, the GOI timely submitted its 
questionnaire response. Alpanil timely submitted its questionnaire 
response on April 8, 2009. The Department issued its first supplemental 
questionnaire to Alpanil on April 30, 2009; Alpanil submitted its 
response on June 2, 2009. Further, the Department issued a second 
supplemental questionnaire to Alpanil on November 6, 2009; Alpanil 
responded on December 1, 2009. On November 30, 2009, the Department 
issued a supplemental questionnaire to the GOI; the GOI responded on 
December 15, 2009.
    On May 5, 2009, the Department received a timely request from 
petitioners to conduct verification pursuant to 19 CFR Sec.  
351.307(b)(1)(v).
    On August 19, 2009, the Department extended the time limit for the 
preliminary results of this administrative review until December 31, 
2009. See Carbazole Violet Pigment 23 from India: Extension of Time 
Limit for Preliminary Results of Countervailing Duty Administrative 
Review, 74 FR 41864 (August 19, 2009).
    On December 11, 2009, Alpanil submitted a letter stating that it 
changed its name on April 9, 2009, to Meghmani Pigments. We are 
evaluating whether to consider this request in this administrative 
review.

Scope of the Order

    The merchandise covered by this order is CVP-23 identified as Color 
Index No. 51319 and Chemical Abstract No. 6358-30-1, with the chemical 
name of diindolo [3,2-b:3',2'-m] triphenodioxazine, 8,18-dichloro-5,15-
diethy-5,15-dihydro-, and molecular formula of 
C34H22Cl2N4O2.\1\
 The subject merchandise includes the crude pigment in any form (e.g., 
dry powder, paste, wet cake) and finished pigment in the form of 
presscake and dry color. Pigment dispersions in any form (e.g., 
pigments dispersed in oleoresins, flammable solvents, water) are not 
included within the scope of the review. The merchandise subject to 
this order is classifiable under subheading 3204.17.9040 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Although the 
HTSUS subheading is provided for convenience and customs purposes, the 
written description of the merchandise covered by the order is 
dispositive.
---------------------------------------------------------------------------

    \1\ The bracketed section of the product description, [3,2-
b:3',2'-m], is not business proprietary information; the brackets 
are simply part of the chemical nomenclature.
---------------------------------------------------------------------------

Subsidies Valuation Information

Benchmark Interest Rates

    For programs requiring the application of a benchmark interest 
rate, 19 CFR 351.505(a)(1) states a preference for using an interest 
rate that the company could have obtained on a comparable commercial 
loan in the 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).
    Pursuant to 19 CFR 351.505(a)(2)(iv), if a program under review is 
a government provided, short-term loan program, the preference would be 
to use a company-specific annual average of the interest rates on 
comparable commercial loans during the year in which the government-
provided loan was taken out, weighted by the principal amount of each 
loan. For this review, the Department required a rupee-denominated 
short-term loan benchmark rate to determine benefits received under the 
Pre-Shipment Export Financing program. For further information 
regarding this program, see the ``Pre-Shipment Shipment Export 
Financing'' section below.
    Alpanil did not have any rupee-denominated short-term loans during 
the POR. Therefore, in accordance with 19 CFR 351.505(a)(3)(ii), the 
Department used a national average rupee-denominated short-term 
interest rate, as reported in the International Monetary Fund's 
publication International Financial Statistics (IMF Statistics) as the 
benchmark to determine if Alpanil received benefits under the pre-
shipment export financing program.

A. Programs Preliminarily Determined To Be Countervailable

1. Pre-Shipment and Post-Shipment Export Financing

    The Reserve Bank of India (RBI), through commercial banks, provides 
short-term pre-shipment financing, or ``packing credits,'' to 
exporters. Upon presentation of a confirmed export order or letter of 
credit to a bank, companies may receive pre-shipment loans for working 
capital purposes (i.e., purchasing raw materials, warehousing, packing, 
transportation, etc.) for merchandise destined for exportation. 
Companies may also establish pre-shipment credit lines upon which they 
draw as needed. Limits on credit lines are established by commercial 
banks and are based on a company's creditworthiness and past export 
performance. Credit lines may be denominated either in Indian rupees or 
in a foreign currency. Commercial banks extending export credit to 
Indian companies must, by law, charge interest at rates determined by 
the RBI.
    Post-shipment export financing consists of loans in the form of 
discounted trade bills or advances by commercial banks. Exporters 
qualify for this program by presenting their export documents to the 
lending bank. The credit covers the period from the date of shipment of 
the goods to the date of realization of the proceeds from the sale to 
the overseas customer. Under the Foreign Exchange Management Act of 
1999, exporters are required to realize proceeds from their export 
sales within 180 days of shipment. Post-shipment financing is, 
therefore, a working capital program used to finance export 
receivables. In general, post-shipment loans are granted for a period 
of not more than 180 days.
    The Department has previously determined that the pre-shipment and 
post-shipment export financing program conferred countervailable 
subsidies on the subject merchandise because: (1) The provision of the 
export financing constitutes a financial contribution pursuant to 
section 771(5)(D)(i) of the Act as a direct transfer of funds in the 
form of loans; (2) the provision of the export financing confers 
benefits on the respondents under section 771(5)(E)(ii) of the Act to 
the extent that the interest rates provided under these programs are 
lower than comparable commercial loan interest rates; and (3) these 
programs are specific under section 771(5A)(A) and

[[Page 979]]

(B) of the Act because they are contingent upon export performance. See 
Final Affirmative Countervailing Duty Determination: Carbazole Violet 
Pigment 23 from India, 69 FR 67321 (November 17, 2004), and 
accompanying Issues and Decision Memorandum (CVP-23 Final 
Determination), at ``Pre-Shipment Export Financing.'' See also Notice 
of Final Affirmative Countervailing Duty Determination: Polyethylene 
Terephthalate Film, Sheet and Strip (PET Film) From India, 67 FR 34905 
(May 16, 2002), and accompanying Issues and Decision Memorandum (PET 
Film Final Determination), at ``Pre-Shipment and Post-Shipment 
Financing.'' There is no new information or evidence of changed 
circumstances that would warrant reconsidering this finding. Therefore, 
we continue to find these programs countervailable.
    In this review, Alpanil reported that it did not receive any loans 
under the post-shipment export financing program that were outstanding 
in the POR. Therefore, for purposes of the preliminary results, we find 
that Alpanil did not use the post-shipment export financing program. 
Furthermore, Alpanil reported that it did not use these programs with 
respect to sales destined to the United States. See Alpanil's 
questionnaire response dated April 8, 2009 at page 11. Alpanil 
explained that its pre-shipment export financing was tied to specific 
export orders and is repaid with either post-shipment export financing 
or export proceeds, whichever is received earlier. Further, Alpanil 
stated that the loans granted were provided at Alpanil's request to the 
bank by letter supported by the specific export order, based on which 
it was able to identify the market and, that the program was not used 
with respect to its sales destined for the United States. See Alpanil's 
supplemental questionnaire response dated June 2, 2009 at pages 3 and 
4.
    Although in the original investigation Alpanil was able to 
demonstrate that none of its pre-shipment loans were provided for 
exports to the United States,\2\ in the documentation Alpanil provided 
in the instant review it did not demonstrate that the loans were only 
for shipments to countries other than the United States. The Department 
specifically asked Alpanil to tie its export orders on each borrowing 
during the POR and to identify the destination of the export sales. In 
response, Alpanil referred the Department to a sample document (``Form 
A,'' containing details of the specific export order) that, according 
to Alpanil, contained the relevant information upon which the pre-
shipment loan was released by the bank. However, this document 
pertained to only one specific loan out of more than sixty loans during 
the period of review. Alpanil did not provide information with regard 
to the remaining loans. Alpanil further stated that the spreadsheet it 
provided contained details showing how the loans were tied to a 
particular export sale; however, in our review of the spreadsheet, we 
did not find sufficient detail to identify the export destination for 
all of these loans to confirm whether the destination for these loans 
was not the United States. See Alpanil's second supplemental response 
dated December 1, 2009 at pages 16, 18 and 19.
---------------------------------------------------------------------------

    \2\ See CVP-23 Final Determination at ``Pre-Shipment 
Financing.'' We note, however, that where a company is not able to 
demonstrate that its pre-shipment loans are tied to destinations 
other than the United States, we normally attribute all pre-shipment 
loans to total exports. See 19 CFR 351.525(b). See also Polyethylene 
Terepthalate Film, Sheet, and Strip from India: Final Results of 
Countervailing Duty Administrative Review, 73 FR 7708 (February 11, 
2008), and accompanying Issues and Decision Memorandum (PET Film 
From India 2005 Review) at ``Pre- and Post-Shipment.''
---------------------------------------------------------------------------

    With regard to pre-shipment loans, the benefit conferred is the 
difference between the amount of interest the company paid on the 
government loan and the amount of interest it would have paid on a 
comparable commercial loan (i.e., the short-term benchmark). Because 
Alpanil did not provide the information necessary to determine the 
markets for which the exports covered by the pre-shipment loans were 
destined, Alpanil did not demonstrate that these loans were tied to a 
particular market. We therefore find that the pre-shipment export loans 
reported by Alpanil are conferred on total exports and are not tied to 
particular markets. To calculate the benefit of the pre-shipment export 
loans, we compared the actual interest paid on the loans with the 
amount of interest that would have been paid at the benchmark interest 
rate for short term loans. See ``Benchmark Interest Rates'' section, 
above. Since the interest that would be due at the benchmark interest 
rate exceeded the actual interest paid monthly by Alpanil, a benefit 
was conferred. We summed the differences and divided the total benefit 
by Alpanil's total exports during the POR. Accordingly, we 
preliminarily determine the net countervailable subsidy under the pre-
shipment export financing program to be 0.80 percent ad valorem for 
Alpanil.

2. Duty Entitlement Passbook Scheme (DEPBS)

    The DEPBS program enables exporting companies to earn import duty 
exemptions in the form of passbook credits rather than cash. All 
exporters are eligible to earn DEPBS credits on a post-export basis, 
provided that the GOI has established a Standard Input Output Norm 
(SION) for the exported product. DEPBS credits can be used to pay 
import duties for any subsequent imports, regardless of whether they 
are consumed in the production of an exported product. DEPBS credits 
are valid for twelve months and are transferable after the foreign 
exchange is realized from the export sales on which the DEPBS credits 
are earned. With respect to subject merchandise, the GOI has 
established a SION. See CVP-23 Final Determination, at ``Duty 
Entitlement Passbook Scheme.'' Therefore, CVP-23 exporters were 
eligible to earn DEPBS credits. Alpanil reported that the rate at which 
they earned DEPBS credits was 5 percent for the January 1 through March 
31, 2007 period and 7 percent for the April 1 through December 31, 
2007, period.
    In the CVP-23 Final Determination, the Department determined that, 
under the DEPBS, a financial contribution, as defined under section 
771(5)(D)(ii) of the Act, is provided because the GOI provides credits 
for the future payment of import duties; and that a benefit is 
conferred pursuant to section 771(5)(E) of the Act in the total amount 
of the credits earned because 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, under section 
351.519(a)(4) of the Department's regulations and section 771(5)(E) of 
the Act, the entire amount of the credits earned during the POR 
constitutes a benefit. Finally, because this program is contingent upon 
export, it is specific under sections 771(5A)(A) and (B) of the Act. 
See CVP-23 Final Determination. See also PET Film Final Determination, 
at ``DEPBS.'' No new information or evidence of changed circumstances 
has been presented since our final determination in CVP-23 to warrant 
reconsideration of this finding. Therefore, we continue to find the 
DEPBS program countervailable.
    In accordance with past practice and pursuant to 19 CFR Sec.  
351.519(b)(2), we continue to find that benefits from the DEPBS are 
conferred as of the date of exportation of the shipment for which

[[Page 980]]

the pertinent DEPBS credits are earned. We calculated the benefit on an 
``as-earned'' basis upon export because DEPBS credits are provided as a 
percentage of the value of the exported merchandise on a shipment-by-
shipment basis and, as such, it is at this point that recipients know 
the exact amount of the benefit (e.g., the available credits that 
amount to a duty exemption).
    Alpanil reported and the GOI confirmed that Alpanil used this 
program during the POR. Alpanil reported that it received post-export 
credits on shipments of subject merchandise under the DEPBS program 
during the POR. Alpanil also reported that it paid required application 
fees for each DEPBS license associated with its export shipments made 
during the POR. We recognize that these fees provide an allowable 
offset to DEPBS benefits in accordance with section 771(6)(A) of the 
Act. Because DEPBS credits are earned on a shipment-by-shipment basis, 
we consider that the benefits are tied to particular products and 
markets, in accordance with 19 CFR 351.525(b)(5). As such, we measure 
the benefit by identifying all DEPBS credits granted on exports of 
subject merchandise to the United States during the POR. We calculated 
the subsidy rate by dividing the benefit (net of application fees) by 
total exports of subject merchandise to the United States during the 
POR. On this basis, we determine Alpanil's countervailable subsidy from 
the DEPBS program to be 6.99 percent ad valorem.

B. Programs Preliminarily Determined To Be Not Used

    We preliminarily determine that Alpanil did not apply for or 
receive benefits during the POR under the programs listed below:
    1. Export Promotion Capital Goods Scheme (EPCGS).
    2. Export Processing Zones (EPZs)/Export Oriented Units (EOUs) 
Programs.
    3. Income Tax Exemption Scheme (Sections 10A and 10B).
    4. Market Development Assistance.
    5. Special Imprest Licenses.
    6. Duty Free Replenishment Certificate.
    7. Advance License Scheme.
    8. State of Gujarat (SOG) Sales Tax Incentive Scheme.
    9. State of Maharashtra (SOM) Sales Tax Incentive Scheme.

C. Programs Determined To Be Terminated

Income Tax Exemption Scheme 80 HHC

    In the CVP-23 Final Determination, the Department had determined 
that deductions of profit derived from exports under section 80HHC of 
India's Income Tax Act are countervailable. See CVP-23 Final 
Determination, at ``Programs Determined to Confer Subsidies.'' In this 
review, Alpanil states that the GOI has discontinued the income tax 
exemption scheme 80 HHC effective April 1, 2004. The GOI has reported 
that this scheme was available only up to March 31, 2004. In addition, 
Alpanil reported that this program has not been replaced by another 
program, and that there are no residual benefits accruing due to the 
exports of CVP-23 from India under this program. The Department found 
in another case that this program had been terminated effective March 
31, 2004, and that no replacement program had been implemented. See 
Polyethylene Terephthalate Film, Sheet, and Strip from India: Final 
Results of Countervailing Duty Administrative Review, 72 FR 6530 
(February 12, 2007), and accompanying Issues and Decision Memorandum, 
at ``Income Tax Exemption Scheme 80HHC (80HHC).'' There is no 
information on the record of this proceeding to contradict that 
determination. Therefore, pursuant to 19 CFR Sec.  351.526(d) of the 
regulations, we find that this program has been terminated.

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we have calculated an 
individual subsidy rate for Alpanil for the POR. We preliminarily 
determine the total countervailable subsidy to be 7.79 percent ad 
valorem for Alpanil.

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(2)(C) of the Act: (1) The cash deposit rate for the company 
listed above will be that established in the final results of this 
review, except if the rate is less than 0.50 percent, and therefore, de 
minimis within the meaning of 19 CFR 351.106(c)(1), in which case the 
cash deposit rate will be zero; (2) for previously reviewed or 
investigated companies not participating in this review, the cash 
deposit rate will continue to be the company-specific rate published 
for the most recent period; (3) if the exporter is not a firm covered 
in this review, or in the original countervailing duty investigation, 
but the manufacturer is, the cash deposit rate will be the rate 
established for the most recent period for the manufacturer of the 
merchandise; and (4) the cash deposit rate for all other manufacturers 
or exporters will continue to be 20.55 percent ad valorem, the all-
others rate from the final determination in the CVD investigation. See 
Final Affirmative Countervailing Duty Determination: Carbazole Violet 
Pigment 23 From India, 69 FR at 67321. These cash deposit requirements, 
when imposed, shall remain in effect until further notice.

Assessment Rates

    Upon publication of the final results of this review, the 
Department shall determine, and Customs and Border Protection (CBP) 
shall assess, countervailing duties on all appropriate entries. 
Pursuant to 19 CFR 351.212(b)(2), the Department will instruct CBP to 
assess countervailing duties by applying the rates included in the 
final results of the review to the entered value of the merchandise. 
The Department intends to issue appropriate assessment instructions 
directly to CBP 15 days after the date of publication of the final 
results of this review.

Disclosure and Public Hearing

    We plan on disclosing the calculations from our preliminary results 
to parties to this segment of the proceeding within five days of the 
public announcement of this notice. See 19 CFR 351.224(b). Interested 
parties who wish to request a hearing, or to participate if one is 
requested, must submit a written request to the Assistant Secretary for 
Import Administration, within 30 days of the date of publication of 
this notice. See 19 CFR 351.310(c). Requests should contain: (1) The 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed.
    Pursuant to 19 CFR 351.309, interested parties may submit written 
comments in response to these preliminary results. The Department will 
notify interested parties of the deadlines for submitting case and 
rebuttal briefs. Parties who submit arguments in this proceeding are 
requested to submit with the argument: (1) A statement of the issues; 
(2) a brief summary of the argument; and (3) a table of authorities 
cited. Case and rebuttal briefs must be served on interested parties, 
in accordance with 19 CFR 351.303(f).
    Unless extended, the Department will issue the final results of 
this administrative review, including the results of its analysis of 
issues raised in any written briefs, not later than 120

[[Page 981]]

days after the date of publication of this notice, pursuant to section 
751(a)(3)(A) of the Act.
    These preliminary results 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, 2009.
Susan H. Kuhbach,
Acting Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-27 Filed 1-6-10; 8:45 am]
BILLING CODE 3510-DS-P