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.

SUMMARY:

On January 10, 2006, the Department of Commerce (the Department) published in the Federal Register its preliminary results of administrative review of the countervailing duty (CVD) order on certain hot-rolled carbon steel flat products from India for the period January 1, 2004, through December 31, 2004. See Notice of Preliminary Results of Countervailing Duty Administrative Review: Certain Hot-Rolled Carbon Flat Products from India, 71 FR 1512 (January 10, 2006) (Preliminary Results). The Department has now completed the administrative review in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act).

Based on our analysis of the comments received, the Department has revised the net subsidy rate for Essar Steel Ltd. (Essar), the producer/exporter of subject merchandise covered by this review. For further discussion of our analysis of the comments received for these final results, see the May 10, 2006, Issues and Decision Memorandum from Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, to David M. Spooner, Assistant Secretary for Import Administration, concerning the Final Results of Countervailing Duty Administrative Review: Certain Hot-Rolled Carbon Steel Flat Products from India (HRC Decision Memorandum 2004). The final net subsidy rate for Essar is listed below in “Final Results of Review.”

EFFECTIVE DATE:

May 17, 2006.

FOR FURTHER INFORMATION CONTACT:

Tipten Troidl or Preeti Tolani, Import Administration, AD/CVD Operations, Office 3, U.S. Department of Commerce, Room 4014, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1767 or (202) 482-0395, respectively.

SUPPLEMENTARY INFORMATION:

Background

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 only Essar. The review covers the period January 1, 2004, through December 31, 2004, and 11 programs. On January 10, 2006, the Department published in the Federal Register its preliminary results. See Preliminary Results at 71 FR 1512. We invited interested parties to comment on the results. On February 21, 2006, we received case briefs from both petitioner ¹ and the respondent, Essar. On February 28, 2006, we received rebuttal briefs from petitioner and Essar. On March 2, 2006, a public hearing was held at the Department of Commerce with respect to Essar.

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 (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).
• SAE/AISI grades of series 2300 and higher.
• Ball bearings steels, as defined in the HTSUS.
• Tool steels, as defined in the HTSUS.
• Silico-manganese (as defined in the HTSUS) 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 HTSUS.

The merchandise subject to this order is currently classifiable 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 Department's 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 HRC Decision Memorandum 2004, which is hereby adopted by this notice. A list of the issues contained in that decision memorandum is attached to this notice as Appendix I. Parties can find a complete discussion of the issues raised in this review and the corresponding recommendations in that public memorandum, which is on file in the Central Records Unit (CRU), room B-099 of the Main Commerce Building. In addition, a complete copy of the HRC Decision Memorandum 2004 can be accessed directly on the World Wide Web at http://ia.ita.doc.gov/frn/ . The paper copy and electronic version of the decision memorandum are identical in content.

Final Results of Review

In accordance with section 705(c)(1)(B)(i) of the Act, we calculated an ad valorem net subsidy rate for Essar. For the period of review (POR), we determine the net subsidy rate to be 4.56 percent ad valorem.

We intend to issue liquidation instructions to U.S. Customs and Border Protection (CBP) for entries or exports made during the period January 1, 2004, through December 31, 2004. We will instruct CBP, within 15 days of publication of the final results of this review, to collect cash deposits of estimated countervailing duties at 4.56 percent ad valorem of the f.o.b. price on all shipments of the subject merchandise from Essar, entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results.

We will instruct CBP to continue to collect cash deposits for non-reviewed companies at the most recent company-specific rate applicable to the company. Accordingly, the cash deposit rate that will be applied to non-reviewed companies covered by this order will be the rate for that company established in the investigation or the most recently completed administrative review. 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 60200 (December 3, 2001). The “all others” rate shall apply to all non-reviewed companies until a review of a company assigned this rate is requested.

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 this notice are issued and published in accordance with section 751(a)(1) and 777(i)(1) of the Act.

Appendix I Issues and Decision Memorandum

I. Subsidies Valuation Information

A. Benchmark for Short-Term Loans

B. Benchmark for Long-Term Loans issued up to 2000

C. Benchmark for Long-Term Loans issued in 2001 and 2002

D. Benchmark for Long-Term Loans issued in 2003 and 2004

II. Analysis Of Programs

A. Programs Determined to Confer Subsidies

1. Export Promotion of Capital Goods Scheme (EPCGS)

2. State Government of Gujarat (SGOG) Tax Incentives

3. Bombay Relief Undertaking (BRU) Act

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

B. Programs Determined Not to be Used

1. Duty Free Replenishment Certificate (DFRC)

2. Pre-Shipment Export Financing

3. Duty Entitlement Passbook (DEPS)

4. Target Plus Scheme

5. Advance Licenses

6. Tax Incentives from the State of Government of Maharashtra (SGOM)

C. Program Determined Not to Be Countervailable

1. Corporate Debt Restructuring

III. Total Ad Valorem Rate

IV. Analysis of Comments

Comment 1: Correct Calculation of State Government of Gujarat Tax Incentives Program

Comment 2: Benchmark Price for High-Grade Iron Ore

Comment 3: Benefit Calculation for the Sale of High-Grade Iron Ore for Less than Adequate Remuneration

Comment 4: Denominator Used in Calculating the Export Promotion of Capital Goods Scheme (EPCGS) Subsidy Rate

Comment 5: Inclusion of a Line Item in an EPCGS License Calculation