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

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Results of Countervailing Duty Administrative Review.

SUMMARY:

On January 7, 2004, the Department of Commerce (the Department) published in the Federal Register its preliminary results of administrative review of the countervailing duty order on certain hot-rolled carbon steel flat products from India for the period April 20, 2001 through December 31, 2002 (see Notice of Preliminary Results of Countervailing Duty Administrative Review: Certain Hot-Rolled Carbon Steel Flat Products from India, 69 FR 907 (January 7, 2004) (Preliminary Results)). The Department has now completed this administrative review in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act).

Based on information received since the Preliminary Results and our analysis of the comments received, the Department has revised the net subsidy rate for Essar Steel, Ltd. (Essar), as discussed in the “Issues and Decision Memorandum from Holly A. Kuga, Acting Deputy Assistant Secretary for AD/CVD Enforcement II to James J. Jochum, Assistant Secretary for Import Administration concerning the Final Results of Countervailing Duty Administrative Review: Certain Hot-Rolled Carbon Steel Flat Products from India” (Decision Memorandum) dated May 6, 2004. The final net subsidy rate for the reviewed company is listed below in the section entitled “Final Results of Review.”

EFFECTIVE DATE:

May 13, 2004

FOR FURTHER INFORMATION CONTACT:

Tipten Troidl, Cindy Robinson or Maura Jeffords, Office of AD/CVD Enforcement VI, Group II, Import Administration, U.S. Department of Commerce, Room 4012, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

On January 7, 2004, the Department published in the Federal Register its Preliminary Results. We invited interested parties to comment on the results. On February 6, 2004, we received case briefs from petitioners and respondent. On February 11, 2004, we received rebuttal briefs from petitioners and respondent². A public hearing was held at the Department on February 25, 2004.

Pursuant to 19 CFR 351.213(b), this review covers only those producers or exporters of the subject merchandise for which a review was specifically requested. Accordingly, this review covers Essar. This review covers the assessment period from April 20, 2001 through December 31, 2002, and eleven programs.

Scope of the Review

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 within 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 (HTSUS), 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).

• AE/AISI grades of series 2300 and higher.
• all bearings steels, as defined in the HTSUS.
• ool steels, as defined in the HTSUS.
• ilico-manganese (as defined in the HTSUS) or silicon electrical steel with a silicon level exceeding 2.25 percent.
• STM specifications A710 and A736.
• SS Abrasion-resistant steels (USS AR 400, USS AR 500).
• ll products (proprietary or otherwise) based on an alloy ASTM specification (sample specifications: ASTM A506, A507).
• on-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 HTSUS.

The merchandise subject to this order is classified in the HTSUS 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 HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise subject to this order is dispositive.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this review are addressed in the Decision Memorandum, which is hereby adopted by this notice. A list of the issues contained in the Decision Memorandum is attached to this notice as Appendix I. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum, which is on file in room B-099 of the Main Commerce Building. In addition, a complete version of the Decision Memorandum can be accessed directly on the World Wide Web at http://ia.ita.doc.gov,, under the heading “Federal Register Notices.” The paper copy and electronic version of the Decision Memorandum are identical in content.

Final Results of Review

In accordance with 19 CFR 351.221(b)(5), we calculated an individual subsidy rate for the producer/exporter, Essar, subject to this review. For the period April 20, 2001, through December 31, 2001, we determine the net subsidy ad valorem rate for Essar is 1.69 percent, and for the period January 01, 2002 through December 31, 2002 the net subsidy ad valorem rate is 16.88 percent.

We will instruct the U.S. Customs and Border Protection (CBP) to assess countervailing duties as indicated above. The Department will instruct the CBP to collect cash deposits of estimated countervailing duties in accordance with the assessment rate calculated for 2002 as detailed above, of the f.o.b. invoice price on all shipments of the subject merchandise from the producer/exporter under review, entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this administrative review.

Because the URAA replaced the general rule in favor of a country-wide rate with a general rule in favor of individual rates for investigated and reviewed companies, the procedures for establishing countervailing duty rates, including those for non-reviewed companies, are now essentially the same as those in antidumping cases, except as provided for in section 777A(e)(2) of the Act. The requested review will normally cover only those companies specifically named. See 19 CFR 351.213(b). Pursuant to 19 CFR 351.212(c), for all companies for which a review was not requested, duties must be assessed at the cash deposit rate, and cash deposits must continue to be collected, at the rate previously ordered. As such, the countervailing duty cash deposit rate applicable to a company can no longer change, except pursuant to a request for a review of that company. See Federal-Mogul Corporation and The Torrington Company v. United States, 822 F. Supp. 782 (CIT 1993) and Floral Trade Council v. United States, 822 F. Supp. 766 (CIT 1993). Therefore, the cash deposit rates for all companies except those covered by this review will be unchanged by the results of this review.

We will instruct the CBP to continue to collect cash deposits for non-reviewed companies at the most recent company-specific or country-wide rate applicable to the company. Accordingly, the cash deposit rates that will be applied to non-reviewed companies covered by this order will be the rate for that company established in the most recently completed administrative proceeding conducted under the URAA. 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). This rate shall apply to all non-reviewed companies until a review of a company assigned this rate is requested. In addition, for the period April 20, 2001 through December 31, 2002, the assessment rates applicable to all non-reviewed companies covered by this order are the cash deposit rates in effect at the time of entry.

This notice also 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/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.

This administrative review and notice are issued and published in accordance with section 751(a)(1) of the Act.

Appendix I - Issues and Decision Memorandum

I.SUBSIDIES VALUATION INFORMATION

A. Creditworthiness

B. Benchmarks for Loans and Discount Rates

II. ANALYSIS OF PROGRAMS

A. Programs Conferring Subsidies

1. Pre-Shipment Export Financing

2. Export Promotion of Capital Goods Scheme (EPCGS)

3. Bombay Relief Undertaking Act (BRU)

4. Duty Entitlement Passbook Scheme

B. Programs Determined to Be Not Used

1. Corporate Debt Restructuring (CDR)

2. Duty Free Remission Certificate Scheme

3. Sick Industrial Companies Act and Board for Industrial and Financial Reconstruction

4. Advance Licenses

5. Exemption of Export Credit from Interest Taxes

6. Income Tax Deductions Under Section 80 HHC

7. Post-Shipment Export Financing

III. TOTAL AD VALOREM RATE

IV. ANALYSIS OF COMMENTS

Comment 1: Denominator for the Pre-Shipment Export Financing Program

Comment 2: Financial Contribution and Benefit under the Duty Entitlement Passbook Scheme (DEPS) Program

Comment 3: Benefit Calculation for DEPS

Comment 4: Revision of Benefits under the Export Promotion Capital Goods Scheme (EPCGS)

Comment 5: Countervailability of the Bombay Relief Undertaking Act (BRU)

Comment 6: Recalculation of the Benefit to Essar under the BRU

Comment 7:Changes to Draft Customs Instructions