45956 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

coating on both sides of the fabric 

consisting of woven polypropylene strip 

and/or woven polyethylene strip, 

laminated woven sacks may be 

classifiable under HTSUS subheadings 

3923.21.0080, 3923.21.0095, and 

3923.29.0000. If entered not closed on 

one end or in roll form (including 

sheets, lay-flat tubing, and sleeves), 

laminated woven sacks may be 

classifiable under other HTSUS 

subheadings including 3917.39.0050, 

3921.90.1100, 3921.90.1500, and 

5903.90.2500. 

If the polypropylene strips and/or 

polyethylene strips making up the fabric 

measure more than 5 millimeters in 

width, laminated woven sacks may be 

classifiable under other HTSUS 

subheadings including 4601.99.0500, 

4601.99.9000, and 4602.90.000. 

Although HTSUS subheadings are 

provided for convenience and customs 

purposes, the written description of the 

scope of this order is dispositive. 

Countervailing Duty Order 

In accordance with section 705(d) of 

the Tariff Act of 1930, as amended (the 

Act), on June 24, 2008, the Department 

published its final determination in the 

countervailing duty investigation of 

LWS from the PRC. See Laminated 

Woven Sacks from the People’s Republic 

of China: Final Affirmative 

Countervailing Determination and Final 

Affirmative Determination, in Part, of 

Critical Circumstances, 73 FR 35639 

(June 24, 2008). 

On July 30, 2008, the ITC notified the 

Department of its final determination, 

pursuant to section 705(b)(1)(A)(i) of the 

Act, that an industry in the United 

States is materially injured as a result of 

subsidized imports of LWS from the 

PRC. 

The ITC determined that critical 

circumstances do not exist with respect 

to subject imports from the PRC. As a 

result of the ITC’s negative critical 

circumstances determination, U.S. 

Customs and Border Protection (CBP) 

will refund all cash deposits and release 

all bonds collected on LWS from the 

PRC entered or withdrawn from 

warehouse, for consumption on or after 

September 4, 2007, and before 

December 3, 2007. 

Countervailing duties will be assessed 

on all unliquidated entries of LWS from 

the PRC entered, or withdrawn from 

warehouse, for consumption on or after 

December 3, 2007, the date on which 

the Department published its 

preliminary affirmative countervailing 

duty determination in the Federal 

Register, and before April 1, 2008, the 

date on which the Department 

instructed the CBP to discontinue the 

suspension of liquidation in accordance 

with section 703(d) of the Act, and on 

all entries of subject merchandise made 

on or after the date of publication of the 

ITC’s final injury determination in the 

Federal Register. Section 703(d) states 

that the suspension of liquidation 

pursuant to a preliminary determination 

may not remain in effect for more than 

four months. Entries of LWS made on or 

after April 1, 2008, and prior to the date 

of publication of the ITC’s final 

determination in the Federal Register 

are not liable for the assessment of 

countervailing duties due to the 

Department’s discontinuation, effective 

April 1, 2008, of the suspension of 

liquidation. 

In accordance with section 706 of the 

Act, the Department will direct CBP to 

reinstitute the suspension of liquidation 

for LWS from the PRC, effective the date 

of publication of the ITC’s notice of final 

determination in the Federal Register, 

and to assess, upon further advice by 

the Department pursuant to section 

706(a)(1) of the Act, countervailing 

duties for each entry of the subject 

merchandise in an amount based on the 

net countervailable subsidy rates for the 

subject merchandise. On or after the 

date of publication of the ITC’s final 

injury determination in the Federal 

Register, CBP must require, at the same 

time as importers would normally 

deposit estimated duties on this 

merchandise, a cash deposit equal to the 

rates noted below: 

Producer/exporter 

Net subsidy 

rate 

(percent) 

Han Shing Chemical Co., Ltd. 

(Han Shing Chemical) ........... 223.74 

Ningbo Yong Feng packaging 

Co., Ltd. (Ningbo) ................. 223.74 

Shandong Qilu Plastic Fabric 

Group, Ltd. (Qilu) .................. 304.40 

Shandong Shouguang 

Jianyuan Chun Co., Ltd. 

(SSJ)/Shandong Longxing 

Plastic Products Company 

Ltd. (SLP) .............................. 352.82 

Zibo Aifudi Plastic Packaging 

Co., Ltd. (Aifudi) .................... 29.54 

All Others .................................. 226.85 

This notice constitutes the 

countervailing duty order with respect 

to LWS from the PRC pursuant to 

section 706(a) of the Act. Interested 

parties may contact the Central Records 

Unit (CRU), Room 1117 of the main 

Commerce building, for copies of an 

updated list of countervailing duty 

orders currently in effect. 

This countervailing duty order is 

issued and published in accordance 

with sections 705(c)(2) and 705(d) of the 

Act and 19 CFR 351.211. 

Dated: August 4, 2008. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E8–18195 Filed 8–6–08; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(C–533–825) 

Polyethylene Terephthalate Film, 

Sheet, and Strip 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 the 

countervailing duty order on 

polyethylene terephthalate (PET) film, 

sheet and strip from India for the period 

January 1, 2006 through December 31, 

2006. We preliminarily determine that 

subsidies are being provided on the 

production and export of PET film from 

India. See the ‘‘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 of this notice, below. 

EFFECTIVE DATE: August 7, 2008 

FOR FURTHER INFORMATION CONTACT: Elfi 

Blum, 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. 

SUPPLEMENTARY INFORMATION: 

Background 

On July 1, 2002, the Department 

published in the Federal Register the 

countervailing duty (CVD) order on PET 

film from India. See Countervailing 

Duty Order: Polyethylene Terephthalate 

Film, Sheet and Strip (PET Film) from 

India, 67 FR 44179 (July 1, 2002) (PET 

Film Order). On July 3, 2007, 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, 72 


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1For our subsidy calculations, we round the 9.5 

years up to 10 years. 

FR 36420 (July 3, 2007). On July 30, 

2006, the Department received timely 

requests to conduct an administrative 

review of the PET Film Order from MTZ 

Polyfilms, Ltd. (MTZ), and from Jindal 

Poly Films Limited of India (Jindal), 

formerly named Jindal Polyester 

Limited, both of which are Indian 

producers and exporters of subject 

merchandise. 

On August 24, 2007, the Department 

initiated an administrative review of the 

CVD order on PET film from India 

covering MTZ and Jindal for the period 

January 1, 2006 through December 1, 

2006. See Initiation of Antidumping and 

Countervailing Duty Administrative 

Reviews and Requests for Revocation in 

Part, 72 FR 48613 (August 24, 2007). On 

October 3, 2007, pursuant to 19 CFR 

351.213(d)(1), Jindal timely withdrew 

its request for an administrative review 

of the CVD order on PET film from 

India. Because no other party requested 

a review of Jindal, on April 10, 2008, the 

Department rescinded the 

administrative review of Jindal. See 

Polyethylene Terephthalate Film, Sheet, 

and Strip from India: Notice of Partial 

Rescission of Administrative Review of 

the Countervailing Duty Order, 73 FR 

19474 (April 10, 2008). 

The Department issued questionnaires 

to the Government of India (GOI) and 

MTZ on October 5, 2007. On November 

27, 2007, the GOI submitted its 

questionnaire response. MTZ submitted 

its questionnaire response on December 

4, 2007. On February 22, 2008, the 

Department extended the time limit for 

the preliminary results of the 

countervailing duty administrative 

review until July 30, 2008. See 

Polyethylene Terephthalate (PET) Film, 

Sheet, and Strip from India: Extension 

of Time Limit for Preliminary Results of 

Countervailing Duty Administrative 

Review, 73 FR 9769 (February 22, 2008). 

The Department issued its first 

supplemental questionnaires to the GOI 

and MTZ on March 14, 2008, and April 

11, 2008, respectively. On March 28, 

2008, the GOI submitted its first 

supplemental response, and MTZ 

submitted its first supplemental 

response on May 7, 2008. The 

Department issued a second 

supplemental questionnaire to the GOI 

and to MTZ on May 14, 2008 and on 

May 28, 2008, respectively. The GOI 

submitted its response on May 28, 2008. 

On June 3, 2008, the Department issued 

a third supplemental questionnaire to 

the GOI and on June 9, 2008 to MTZ. 

The GOI submitted its response to the 

third supplemental questionnaire on 

June 10, 2008. MTZ responded to the 

second and third supplemental 

questionnaire on June 23, 2008. On July 

11, 2008, the Department issued a fourth 

supplemental questionnaire to the GOI 

and MTZ, respectively. The GOI filed its 

response on July 18, 2008, and MTZ on 

July 22, 2008. 

Scope of the Order 

For purposes of the order, the 

products covered are all gauges of raw, 

pretreated, or primed Polyethylene 

Terephthalate Film, Sheet and Strip, 

whether extruded or coextruded. 

Excluded are metallized films and other 

finished films that have had at least one 

of their surfaces modified by the 

application of a performance–enhancing 

resinous or inorganic layer of more than 

0.00001 inches thick. Imports of PET 

film are classifiable in the Harmonized 

Tariff Schedule of the United States 

(HTSUS) under item number 

3920.62.90. HTSUS subheadings are 

provided for convenience and customs 

purposes. The written description of the 

scope of this proceeding is dispositive. 

Subsidies Valuation Information 

Allocation Period 

Under 19 CFR 351.524(d)(2)(i), we 

will presume the allocation period for 

non–recurring subsidies to be the 

average useful life (AUL) prescribed by 

the Internal Revenue Service (IRS) for 

renewable physical assets of the 

industry under consideration (as listed 

in the IRS’s 1977 Class Life Asset 

Depreciation Range System, and as 

updated by the Department of the 

Treasury). This presumption will apply 

unless a party claims and establishes 

that these tables do not reasonably 

reflect the AUL of the renewable 

physical assets of the company or 

industry under investigation. 

Specifically, the party must establish 

that the difference between the AUL 

from the tables and the company–

specific AUL or country–wide AUL for 

the industry under investigation is 

significant, pursuant to 19 CFR 

’351.524(d)(2)(i) and (ii). For assets used 

to manufacture plastic film, such as PET 

film, the IRS tables prescribe an AUL of 

9.5 years.1 In the previous segment of 

this proceeding, the Department 

determined that MTZ had rebutted the 

presumption and applied a company–

specific AUL of 20 years. See 

Polyethylene Terephthalate 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, at ‘‘Allocation Period’’

(PET Film Final Results of 2005 Review). 

Therefore, the Department is using an 

AUL of 20 years for MTZ in allocating 

non–recurring subsidies. 

Benchmark Interest Rates and Discount 

Rates 

For programs requiring the 

application of a benchmark interest rate 

or discount rate, 19 CFR 351.505(a)(1) 

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 special purpose 

bank for purposes of calculating 

benchmark rates. The Department has 

previously determined that the 

Industrial Development Bank of India 

(IDBI) is a government–owned special 

purpose bank. See Final Results of 

Countervailing Duty Administrative 

Review: Polyethylene Terephthalate 

Film, Sheet, and Strip from India, 71 FR 

7534 (February 13, 2006), and 

accompanying Issues and Decision 

Memorandum, at Comment 3 (PET Film 

Final Results of 2003 Review). Further, 

in the PET Film Final Results of 2005 

Review, at ‘‘Benchmark Interest Rates 

and Discount Rates,’’ the Department 

determined that the Industrial Finance 

Corporation of India (IFCI) and the 

Export–Import Bank of India (EXIM) are 

government–owned special purpose 

banks. As such, the Department does 

not use loans from the IDBI, IFCI, or 

EXIM, if reported by respondents, as a 

basis for loan benchmark. 

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 and Post–Shipment 

Export Financing programs. For further 

information regarding this program, see 

the ‘‘Pre–Shipment and Post–Shipment 

Export Financing’’ section below. 


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2MTZ provided the Department with limited 

information regarding its long-term loans for 

purposes of establishing a company-specific 

benchmark. In its original questionnaire response, 

MTZ stated that it did not receive any packing 

credits in 2006 and thus did not respond to the 

benchmark questions. In the same response MTZ 

did not address the Benchmark Appendix for longterm loans with respect to programs such as EPCGS. 

See MTZ’s Questionnaire Response, at 12 

(December 5, 2007) (MTZ’s Questionnaire 

Response). In its first supplemental response, MTZ 

provided bank ledger accounts including postings 

dating back to 1999. See MTZ’s First Supplemental 

Questionnaire Response, at 4-5, and Exhibit S1-4(a) 

(May 7, 2008) (MTZ’s First Supplemental 

Response). MTZ further provided loan agreements 

for three banks, but MTZ did not clearly identify 

which supporting information pertains to its shortterm loan and long-term loans. In its second 

supplemental questionnaire, the Department 

requested that MTZ fill out the prepared 

spreadsheet to allow, among other information, for 

the calculation of benchmarks. MTZ, in its second 

supplemental response, stated that it is unable to 

extract the loan data in the form requested by the 

Department, as the information is not maintained , 

if at all, in that form. See MTZ’s Second 

Supplemental Response, at S2-1-2, (June 23, 2008) 

(MTZ’s Second Supplemental Questionnaire 

Response). 

We requested from MTZ information 

on rupee–denominated and U.S. dollar–

denominated short–term commercial 

loans outstanding during the period of 

review (POR) on three separate 

occasions: in the original questionnaire, 

the first supplemental questionnaire, 

and in the second supplemental 

questionnaire. MTZ reported that it did 

not receive rupee–denominated and 

U.S. dollar–denominated short–term 

commercial loans. MTZ further stated 

that it was unable to provide loan 

information in the form requested by the 

Department. Specifically, MTZ stated 

that MTZ does not maintain the 

information in a form permitting 

extraction of the data as requested by 

the Department. In response to the 

Department’s fourth supplemental 

questionnaire, MTZ provided the 

Department with information on its 

short–term rupee–denominated loans 

during the POR. See MTZ’s Fourth 

Supplemental Questionnaire Response, 

at S4–1 and Exhibits S4–1(a) (July 22, 

2008) (MTZ’s Fourth Supplemental 

Questionnaire Response). However, the 

Department finds MTZ’s information to 

be incomplete. For further discussion, 

see the ‘‘Pre–Shipment and Post–

Shipment Export Financing’’ section 

below. Because MTZ provided the 

Department with incomplete 

information regarding its short–term 

rupee–denominated loans for purposes 

of establishing a company–specific 

benchmark loan interest rate, and is 

unable to provide us with the 

information requested to allow for the 

calculation of long–term rupee and U.S. 

dollar denominated benchmark rates, 

we are using a national average dollar–

denominated short–term and long–term 

interest rate, as reported in the 

International Monetary Fund’s 

publication ‘‘International Financial 

Statistics’’ (IMF Statistics), in 

accordance with 19 CFR 

351.505(a)(3)(ii). Further, for those 

programs requiring a rupee–

denominated discount rate or the 

application of a rupee–denominated 

long–term benchmark rate, we also used 

national average interest rates from the 

IMF Statistics, pursuant to 19 CFR 

351.505(a)(3)(ii). With respect to long–

term loans and grants allocated over 

time, the Department required 

benchmarks and discount rates to 

determine benefits received under the 

Export Promotion Capital Goods 

Scheme (EPCGS) program. As stated 

above, MTZ was unable to report 

comparable commercial long–term 

rupee–denominated loans for all 

required years.2 Therefore, we relied on 

the IMF statistics as benchmarks for the 

required years. 

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. 

In the investigation, the Department 

determined that the pre–shipment and 

post–shipment export financing 

programs 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 

inasmuch as the interest rates provided 

under these programs are lower than 

commercially available interest rates; 

and (3) these programs are specific 

under section 771(5A)(B) of the Act 

because they are contingent upon export 

performance. See 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, 

for these preliminary results, we 

continue to find this program 

countervailable. 

In response to the original 

questionnaire, MTZ reported that in 

2005 it obtained packing credits based 

on its ability to present its export orders 

to its bank and to receive, as a loan, a 

portion of the funds to be paid by the 

customer in advance. As these payments 

are to be made in foreign currency and 

against firm sales, MTZ states, it pays a 

lower rate of interest on those foreign 

currency short–term loans than for other 

short term borrowing. According to 

MTZ, these short–term loans were not 

given under the Pre- and Post–Shipment 

Programs because MTZ did not borrow 

from the Reserve Bank of India. MTZ 

further stated that it did not receive any 

packing credits in 2006, and therefore, 

provided no other information with 

respect to this program. See MTZ’s 

Original Questionnaire Response, at 12. 

In its first supplemental response, 

MTZ reiterated that it obtains loans 

from its banks based on its ability to 

take export orders, and these loans are 

not Pre–and Post–Shipment export 


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financing identified by the Department 

because MTZ does not borrow money 

from the RBI. Furthermore, MTZ 

maintained that the Department had 

defined the term ‘‘packing credit’’ as 

credit provided by the RBI. In addition, 

contrary to its claim that it did not 

receive any packing credits, MTZ 

included supporting documentation for 

one such pre–shipment credit obtained 

during the POR. See MTZ’s First 

Supplemental Questionnaire Response, 

at 5–6, and Exhbit S1–5. 

In response to the Department’s 

second supplemental questionnaire, 

requesting that MTZ provide 

information regarding all short–term 

loans outstanding during the POR, MTZ 

referred to Exhibit S2–1. However, this 

exhibit was neither included in the 

paper copy of the response nor in the 

electronic submission of the 

spreadsheets. See MTZ’s Second 

Supplemental Questionnaire Response, 

at S2–1. 

The GOI, in its first supplemental 

response, confirmed that, under the preand post–shipment export financing 

program, commercial banks extend 

working capital loans to exporters to 

purchase raw materials, etc., and that 

those exporters: 

generally qualify for export financing 

under the program by presenting to 

a bank a confirmed export order or 

letter of credit issued by a foreign 

importer. The bank then establishes 

pre–shipment credit limits upon 

which the exporter may draw loans 

as needed. 

See GOI’s First Supplemental 

Questionnaire Response, at 13–14 

(March 28, 2008) (GOI’s First 

Supplemental Questionnaire Response). 

The GOI further reported that the RBI 

sets a ceiling on the interest rates banks 

may charge to borrowers under the 

program. Within this ceiling rate, banks 

are free to fix the interest rates for 

exporters on the basis of their actual 

cost of funds, operating expenses, etc. 

Also, in the same response, the GOI 

states that the ‘‘RBI has not prescribed 

any application process or application 

form for Export Credit program. 

Commercial banks directly administer 

the program in accordance with their 

own procedures.’’ Id. at 15. 

MTZ’s description of the process and 

conditions for obtaining these ‘‘packing 

credits’’ for export is consistent with the 

GOI’s own description of its pre–

shipment and post–shipment program, 

and the Department’s description above. 

The Department has not, in this 

administrative review or any prior 

segment under this order defined pre–

shipment and post–shipment loans 

under this program as short–term loans 

obtained by a respondent from the RBI. 

On the contrary, the Department 

specifically stated that ‘‘the RBI, 

through commercial banks, provides 

short–term pre–shipment financing, or 

packing credits, to exporters. . . 

Commercial banks extending export 

credit to Indian companies must, by 

law, charge interest at rates determined 

by the RBI.’’ See PET Film Final Results 

of 2005 Review, at ‘‘Pre–and Post–

Shipment Program,’’ (emphasis added). 

On July 11, 2008, the Department 

issued a fourth supplemental 

questionnaire to provide MTZ with an 

additional opportunity to provide the 

information that it claimed to have 

provided in its second supplemental 

questionnaire response. In its response, 

MTZ stated that the missing Exhibit S2–

1 from its second supplemental 

response related to the pre- and post–

shipment loans. Instead of providing a 

copy of the missing Exhibit S2–1, MTZ 

provided two spreadsheets in response 

to the Department’s renewed request to 

report all short–term loans outstanding 

during the POR: ‘‘Short–Term Interest 

Bench Mark’’ {sic} and ‘‘Pre- and Post–

Shipment Financing.’’ The written 

response to the Department’s request 

did not provide any descriptions or 

explanation of the loan data MTZ 

reported in the spreadsheets. See MTZ’s 

Fourth Supplemental Questionnaire 

Response, at S4–1 and Exhibits S4–1(a) 

and S4–1(A)(ii) (July 22, 2008) (MTZ’s 

Fourth Supplemental Questionnaire 

Response). Furthermore, upon review of 

MTZ’s new information, the Department 

was unable to reconcile the information 

provided by MTZ in this response with 

the information in MTZ’s First 

Supplemental Response, at S1–5. 

Specifically, the short–term loan 

information submitted in Exhibit S1–5 

of the first supplemental response was 

neither reflected in the spreadsheet 

termed ‘‘Short–Term Interest Bench 

Mark’’ {sic} nor in the spreadsheet 

termed ‘‘Pre- and Post–Shipment 

Financing.’’ See Fourth Supplemental 

Questionnaire Response, at Exhibit S3–

1(a) and S3–1(a)(ii). Based on this 

analysis, the Department determines 

that, despite repeated requests for 

complete information, the short–term 

loan information provided by MTZ 

remains incomplete, and is thus 

unreliable and unuseable. 

The Department preliminarily 

determines that MTZ obtained pre–

shipment and post shipment export 

financing loans under the GOI’s Pre–

Shipment and Post–Shipment Export 

Financing program because the 

application process and requirements 

described by MTZ to obtain short–term 

loans from commercial banks for pre–

shipment and post–shipment export 

financing (see MTZ’s First 

Supplemental Questionnaire Response, 

at 5–6), is consistent with the 

description of the program provided by 

the GOI (see GOI’s First Supplemental 

Response, at 13–15). See also PET Film 

Final Results of 2005 Review, at ‘‘Pre–

and Post Shipment Program.’’ As 

discussed above, the Department 

repeatedly requested that MTZ provide 

all short–term loans outstanding during 

the POR, and record evidence indicates 

that MTZ has failed to provide the 

Department with reliable and useable 

information regarding its short–term 

export financing loans. As a result, the 

Department does not have the 

information necessary to calculate a rate 

for MTZ based on its own information 

under the pre–shipment and post–

shipment program for theses 

preliminary results. 

Application of Facts Available 

Section 776 of the Tariff Act of 1930, 

as amended (the Act), governs the use 

of facts available and adverse facts 

available. Section 776(a) provides that if 

an interested party or any other person: 

(1) withholds information that has been 

requested by the Department; (2) fails to 

provide such information by deadlines 

or in the form and manner requested; (3) 

significantly impedes a proceeding; or 

(4) provides such information but the 

information cannot be verified, the 

Department shall use the facts otherwise 

available in reaching its determination. 

The statute requires that certain 

conditions be met before the 

Department may resort to facts 

available. 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 an 

opportunity to remedy or to explain the 

deficiency. 

If the party fails to remedy the 

deficiency within the applicable 

timelines, the Department may, subject 

to section 782(e) of the Act, disregard all 

or part of the original and subsequent 

responses, as appropriate. Section 

782(e) of the Act states that the 

Department shall not decline to 

consider information deemed 

‘‘deficient’’ under section 782(d) of the 

Act if: (1) the information is submitted 

by the established deadline; (2) the 

information can be verified; (3) the 

information is not so incomplete that it 

cannot serve as a reliable basis for 

reaching the applicable determination; 

(4) the interested party has 


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demonstrated that it acted to the best of 

its ability; and (5) the information can 

be used without undue difficulties. 

For these preliminary results, we 

determine that the application of facts 

available is warranted with respect to 

MTZ for the pre–shipment and post–

shipment export financing program. As 

noted above, we asked MTZ on three 

occasions to provide the Department 

with its short–term loan information. 

MTZ first responded that it did not 

believe it participated in the program 

because it did not obtain loans from the 

RBI, and because it did not receive any 

packing credits in 2006. See MTZ 

Questionnaire Response, at 12. MTZ did 

not provide any loan information. 

However, in its original questionnaire, 

the Department stated that ‘‘{t}he 

Reserve Bank of India (RBI), through 

commercial banks, provides pre–

shipment financing or packing credits,’

to exporters’’ (emphasis added). The 

Department, from the onset of this 

administrative review, clearly identified 

the pre–shipment and post–shipment 

export financing loans under this 

program as loans obtained from 

commercial banks, and not through the 

RBI. This language is consistent with 

the language used to describe the 

program in every other segment of this 

proceeding. 

In its first supplemental response, 

MTZ again failed to supply any loan 

data and reiterated the application 

process described in the original 

response, and that it believes that the 

loans it obtained are not part of the preand post shipment export financing 

program identified by the Department, 

as it does not borrow from the RBI. In 

the same response, MTZ asserted that 

the Department had defined ‘‘packing’’

credits ‘‘as being those credits which 

were expressly provided by the Reserve 

Bank of India.’’ See MTZ’s First 

Supplemental Questionnaire Response, 

at 5–6. Exhibit S1–5 of the same 

response provided sample 

documentation for export financing 

obtained by MTZ during the POR. This 

exhibit served as sample documentation 

supporting the application process for 

export financing, as described in MTZ’s 

response, and was issued during the 

POR. Not only did MTZ’s description of 

the application process coincide with 

the Department’s and the GOI’s 

description of the program, but it also 

evidenced that MTZ obtained export 

financing through this GOI program 

during the POR. Since this exhibit is 

proprietary, we will further discuss this 

exhibit in MTZ’s calculation 

memorandum under ‘‘Loans.’’

In the second supplemental 

questionnaire, the Department again 

requested that MTZ report all pre–and 

post–shipment export loans received 

during the POR from private 

commercial or semi–commercial banks, 

as well as from any government–owned 

entity. In response, MTZ referred to 

Exhibit S2–1 of its MTZ’s Second 

Supplemental Questionnaire Response; 

however, the exhibit was not included 

in either the written response or the 

data set. 

On July 11, 2008, in order to clarify 

whether there was such an exhibit with 

the loan information, the Department 

again, in a fourth supplemental 

questionnaire, asked MTZ to report all 

its short–term loans outstanding during 

the POR, and also to report all pre–

shipment and post–shipment export 

financing loans separately. In MTZ’s 

Fourth Supplemental Questionnaire 

Response, it provided two spreadsheets, 

‘‘Short–Term Interest Bench Mark’’ {sic} 

and ‘‘Pre- and Post–Shipment 

Financing.’’ Upon examining the 

information provided in the 

spreadsheets, the Department was 

unable to find the loan identified in 

Exhibit S1–5 of MTZ’s First 

Supplemental Questionnaire Response 

in either Exhibit S3–1(a), ‘‘Short–Term 

Interest Bench Mark’’ {sic} or S3–

1(a)(ii), ‘‘Pre and Post Shipment 

Financing,’’ of MTZ’s Fourth 

Supplemental Questionnaire Response. 

As a result, we have preliminarily 

determined that the loan data is not 

complete; without a reconciliation, the 

extent to which this data is incomplete 

is unclear. 

As discussed above, the Department 

asked MTZ to provide the requested 

pre–shipment and post–shipment 

export financing loan information on 

four separate occasions, the original 

questionnaire and three supplemental 

questionnaires; yet, the information on 

the record remains incomplete. Because 

MTZ failed to provide all the 

information requested by the 

Department, and MTZ’s failure to 

provide this information within the 

established deadlines impeded our 

review, we find that the application of 

facts otherwise available is warranted 

under sections 776(a)(2)(A), (B), and (C) 

of the Act. 

Application of Facts Available With An 

Adverse Inference 

Section 776(b) of the Act provides 

that the Department may use an 

inference adverse to the interests of a 

party that has failed to cooperate by not 

acting to the best of its ability to comply 

with the Department’s requests for 

information. See also the SAA. The 

statute provides, in addition, that in 

selecting from among facts available the 

Department may, subject to the 

corroboration requirements of section 

776(c) of the Act, rely upon information 

drawn from the petition, a final 

determination in the investigation, any 

previous administrative review 

conducted under section 751 of the Act 

(or section 753 for countervailing duty 

(CVD) cases), or any other information 

on the record. See section 776(b) of the 

Act. 

The Department’s practice when 

selecting an adverse rate from among 

the possible sources of information is to 

ensure that the rate 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 the 

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 

experience, selecting the highest prior 

rate ‘‘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) (emphasis 

omitted). 

Because MTZ failed to cooperate to 

the best of its ability to comply with the 

Department’s requests for information, 

an adverse inference, in accordance 

with section 776(b) of the Act, is 

warranted. Accordingly, the Department 

is making an adverse inference that the 

loan data is incomplete and therefore 

unreliable, and thus cannot be used for 

these preliminary results, pursuant to 

section 782(e)(3) of the Act. 

The Department normally determines 

the benefit conferred by the pre–

shipment and post–shipment loans as 

the difference between the amount of 

interest the company paid on the loan 

and the amount of interest it would 

have paid on a comparable commercial 

loan during the POR. However, because 

MTZ failed to provide us with complete 

loan information this calculation is not 

possible. Therefore, as adverse facts 

available, for purposes of these 

preliminary results, the Department 

selected the highest calculated rate for 


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3See MTZ’s Original Questionnaire Response, at 

10. 

the same program in this proceeding, 

2.9 percent ad valorem. See PET Film 

Final Determination, at ‘‘Pre–Shipment 

and Post–Shipment Export Financing.’’

Corroboration of Secondary Information 

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. 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. See the 

Statement of Administrative Action 

accompanying the Uruguay Round 

Agreements Act, H.R. Doc. No. 103–316, 

Vol. 1, 870 (1994) (SAA) at 869. 

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 rate being used as AFA was 

calculated in the final determination of 

the investigation in this proceeding. No 

information has been presented that 

calls into question the reliability of this 

calculated rate. With respect to the 

relevance aspect of corroboration, the 

Department will consider information 

reasonably at its disposal in considering 

the relevance of information used to 

calculate a countervailable subsidy 

benefit. Where circumstances indicate 

that the information is not appropriate 

as adverse facts available, the 

Department will not use it. See, e.g., 

Fresh Cut Flowers from Mexico: Final 

Results of Antidumping Duty 

Administrative Review, 61 FR 6812, 

6814 (February 22, 1996). The rate being 

used is relevant because it was 

calculated for the same program, Pre–

Shipment and Post–Shipment Export 

Financing, and in the same proceeding, 

PET film from India. 

On this basis, we preliminarily 

determine the countervailable subsidy 

for the pre–shipment and post–export 

shipment financing to be 2.9 percent ad 

valorem for MTZ. 

2. Advance License Program (ALP) 

Under the ALP, exporters may import, 

duty free, specified quantities of 

materials required to manufacture 

products that are subsequently 

exported. The exporting companies, 

however, remain contingently liable for 

the unpaid duties until they have 

fulfilled their export requirement. The 

quantities of imported materials and 

exported finished products are linked 

through standard input–output norms 

(SIONs) established by the GOI. During 

the POR, MTZ used an advance license 

to import certain materials duty free. 

In the 2005 administrative review of 

this proceeding, the GOI indicated that 

it had revised its Foreign Trade Policy 

and Handbook of Procedures for the 

ALP during that POR. The Department 

analyzed the changes introduced by the 

GOI to the ALP during 2005 and 

acknowledged that certain 

improvements to the ALP system were 

made. However, the Department found 

that systemic issues continued to exist 

in the ALP system during the POR. 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 Comment 3 (PET Film 

Final Results of 2004 Review); and 

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), and accompanying 

Issues and Decision Memorandum, at 

Comment 10 (Lined Paper - Final 

Determination). Based on the 

information submitted by the GOI and 

examined at verification of the 2004 and 

2005 PORs, the Department noted that 

the systemic issues previously 

identified by the Department in PET 

Film Final Results of 2004 Review 

continued to exist. See PET Film Final 

Results of 2004 Review, 72 FR 6530, at 

Comment 3. See also PET Film Final 

Results of 2005 Review, at ‘‘Advance 

License Program (ALP).’’

There is no new information on the 

record of this review for the Department 

to reconsider its determination. 

Accordingly, the Department continues 

to find that the ALP confers a 

countervailable subsidy because: (1) a 

financial contribution, as defined under 

section 771(5)(D)(ii) of the Act, is 

provided under the program, as the GOI 

exempts the respondents from the 

payment of import duties that would 

otherwise be due; (2) the GOI does not 

have in place and does not apply a 

system that is reasonable and effective 

for the purposes intended in accordance 

with 19 CFR 351.519(a)(4), to confirm 

which inputs, and in what amounts, are 

consumed in the production of the 

exported products; thus, the entire 

amount of the import duty deferral or 

exemption earned by the respondent 

constitutes a benefit under section 

771(5)(E) of the Act; and, (3) this 

program is specific under section 

771(5A)(B) of the Act because it is 

contingent upon exportation. 

Pursuant to 19 CFR 351.524(c)(1), the 

exemption of import duties normally 

provides a recurring benefit. Under this 

program, for 2006, MTZ did not have to 

pay certain import duties for inputs that 

were used in the production of subject 

merchandise. Thus, we are treating the 

benefit provided under the ALP as a 

recurring benefit. To calculate the 

subsidy, we first determined the total 

value of import duties exempted during 

the POR. From this amount, we 

subtracted the required application fees 

paid for each license during the POR as 

an allowable offset in accordance with 

section 771(6) of the Act. We then 

divided the resulting net benefit by the 

appropriate value of export sales. 

Consistent with our calculations in the 

final results of the 2004 administrative 

review, ‘‘deemed export’’ sales are 

included in the export sales 

denominator for the ALP only when the 

respondents applied for and were 

bestowed licenses during the POR based 

on both physical exports and deemed 

exports. However, MTZ stated that it 

had physical exports only;3 therefore, 

we only used physical export sales in 

the denominator. On this basis, we 

determine the countervailable subsidy 

provided under the ALP to be 5.03 

percent ad valorem for MTZ. 

3. Export Promotion Capital Goods 

Scheme (EPCGS) 

The EPCGS provides for a reduction 

or exemption of customs duties and 

excise taxes on imports of capital goods 

used in the production of exported 

products. Under this program, 

producers pay reduced duty rates on 

imported capital equipment by 

committing to earn convertible foreign 

currency equal to four to five times the 

value of the capital goods within a 

period of eight years. Once a company 

has met its export obligation, the GOI 

will formally waive the duties on the 

imported goods. If a company fails to 

meet the export obligation, the company 

is subject to payment of all or part of the 

duty reduction, depending on the extent 

of the shortfall in foreign currency 

earnings, plus penalty interest. 

In the investigation, the Department 

determined that import duty reductions 

provided under the EPCGS are a 

countervailable export subsidy because 


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the scheme: (1) provides a financial 

contribution pursuant to section 

771(5)(D)(ii) in the form of revenue 

forgone for not collecting import duties; 

(2) respondents benefit under section 

771(5)(E) of the Act in two ways by 

participating in this program; and (3) 

the program is contingent upon export 

performance, and is specific under 

section 771(5A)(B) of the Act. PET Film 

Final Results of 2004 Review, 72 FR 

6530, at ‘‘EPCGS.’’ There is no new 

information or evidence of changed 

circumstances that would warrant 

reconsidering our determination that 

this program is countervailable. 

Therefore, for these preliminary results, 

we continue to find this program 

countervailable. 

The first benefit is the amount of 

unpaid import duties that would have to 

be paid to the GOI if accompanying 

export obligations 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. 

Id. The second benefit is the waiver of 

duty on imports of capital equipment 

covered by those EPCGS licenses for 

which the export requirement has 

already been met. For those licenses for 

which companies demonstrate that they 

have completed their export obligations, 

we treat the import duty savings as 

grants received in the year in which the 

GOI waived the contingent liability on 

the import duty exemption. 

Import duty exemptions under this 

program are provided for the purchase 

of capital equipment. The preamble to 

our regulations states that if a 

government provides an import duty 

exemption tied to major equipment 

purchases, ‘‘it may be reasonable to 

conclude that, because these duty 

exemptions are tied to capital assets, the 

benefits from such duty exemptions 

should be considered non–recurring . . 

.’’ See Countervailing Duties; Final Rule, 

63 FR 65348, 65393 (November 25, 

1998). In accordance with 19 CFR 

351.524(c)(2)(iii), we are treating these 

exemptions as non–recurring benefits. 

MTZ reported that it imported capital 

goods under the EPCGS in years prior to 

the POR. According to the information 

provided in its responses, MTZ received 

various EPCGS licenses for equipment 

involved in the production of subject 

merchandise. Further, we note that MTZ 

did not demonstrate that its respective 

EPCGS licenses are tied to the 

production of a particular product 

within the meaning of 19 CFR 

351.525(b)(5). As such, we find that 

MTZ’s respective EPCGS licenses 

benefit all of the company’s exports. 

MTZ met the export requirements for 

certain EPCGS licenses prior to the 

current POR, and the GOI formally 

waived the relevant import duties prior 

to this POR. For other licenses, 

however, MTZ has not yet met its export 

obligation as required under the 

program. Therefore, although MTZ has 

received a deferral from paying import 

duties when the capital goods were 

imported, the final waiver on the 

obligation to pay the duties has not yet 

been granted for many of these imports. 

For MTZ’s EPCGS licenses for which 

the GOI has formally waived the duties, 

we treat the full amount of the waived 

duty as a grant received in the year in 

which the GOI officially granted the 

waiver. To calculate the benefit received 

from the GOI’s formal waiver of import 

duties on MTZ’s capital equipment 

imports in the prior review, we 

considered the total amount of duties 

waived (net of any required application 

fees paid) to be the benefit. See section 

771(6) of the Act. Further, consistent 

with the approach followed in the 

investigation, we determine the year of 

receipt of the benefit to be the year in 

which the GOI formally waived MTZ’s 

outstanding import duties. See PET Film 

Final Determination, 67 FR 34905, at 

Comment 5. Next, we performed the 

‘‘0.5 percent test,’’ as prescribed under 

19 CFR 351.524(b)(2), for each year in 

which the GOI granted MTZ an import 

duty waiver. For all years in which MTZ 

received the final waiver of duties 

deferred under EPCGS licenses, the 

value of the duties waived exceeded 0.5 

percent of MTZ’s total export sales. 

Thus, in accordance with 19 CFR 

351.524(b), we allocated the resulting 

benefits over MTZ’s company–specific 

AUL. See ‘‘Allocation Period’’ section, 

above. 

As noted above, import duty 

reductions or exemptions that MTZ 

received on the imports of capital 

equipment for which it has not yet met 

export obligations may have to be repaid 

to the GOI if the obligations under the 

licenses are not met. Consistent with 

our practice and prior determinations, 

we will treat the unpaid import duty 

liability as an interest–free loan. See 19 

CFR 351.505(d)(1); and see, e.g., Final 

Affirmative Countervailing Duty 

Determination: Bottle–Grade 

Polyethylene Terephthalate (PET) Resin 

From India, 70 FR 13460 (March 21, 

2005), and accompanying Issues and 

Decision Memorandum, (Final 

Determination Indian PET Resin), at 

‘‘EPCGS.’’

The amount of the unpaid duty 

liabilities to be treated as an interest–

free loan is the amount of the import 

duty reduction or exemption for which 

the respondent applied, but, as of the 

end of the POR, had not been formally 

waived by the GOI. Accordingly, we 

find the benefit to be the interest that 

MTZ would have paid during the POR 

had it borrowed the full amount of the 

duty reduction or exemption at the time 

of importation. See, e.g., Preliminary 

Results and Rescission in Part of 

Countervailing Duty Administrative 

Review: Polyethylene Terephthalate 

Film, Sheet, and Strip from India, 70 FR 

46483, 46485 (August 10, 2005) (PET 

Film Preliminary Results of 2003 

Review) (unchanged in the final results, 

71 FR 7534). 

As stated above, the time period for 

fulfilling the export commitment 

expires eight years after importation of 

the capital good. Consequently, the date 

of expiration of the time period to fulfill 

the export commitment occurs more 

than one year after the date of 

importation of the capital goods. 

Pursuant to 19 CFR 351.505(d)(1), the 

appropriate benchmark for measuring 

the benefit is a long–term interest rate 

because the event upon which 

repayment of the duties depends (i.e., 

the date of expiration of the time period 

to fulfill the export commitment) occurs 

more than one year after the date of 

importation of the capital goods. As the 

benchmark interest rate, we used the 

national average interest rate from the 

IMF statistics for the year in which the 

capital good was imported and the duty 

reduction or exemption was originally 

granted. See the ‘‘Benchmark Interest 

Rates and Discount Rates’’ section 

above. 

The benefit received under the EPCGS 

is the total amount of: (1) the benefit 

attributable to the POR from the grant of 

formally waived duties for imports of 

capital equipment for which 

respondents met the export obligation 

by December 31, 2005, and/or (2) 

interest that should have been paid on 

the contingent liability loans for imports 

of capital equipment for which MTZ has 

not met its export obligation. To 

calculate the benefit from the formally 

waived duties for imports of capital 

equipment for which MTZ has met its 

export requirements, we treated each 

year’s waived amount as a non–

recurring grant. We applied the grant 

methodology set forth in 19 CFR 

351.524(d), using the discount rates 

discussed in the ‘‘Benchmark Interest 

Rates and Discount Rates’’ section above 

to determine the benefit amounts 

attributable to the POR. 

To calculate the benefit from the 

contingent liability loans for MTZ, we 

multiplied the total amount of unpaid 

duties under each license by the long–

term benchmark interest rate for the 


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4MTZ stated, in its second supplemental 

response, at 8-9, that it was not liable for certain 

other duties during the year. However, MTZ did not 

provide any supporting documentation regarding 

these duties. Thus, we have included these duties 

in our calculations. We intend to inquire further 

about these duties. 

year in which the license was 

approved.4 We summed this amount 

with the allocated benefits discussed 

above to determine the total benefit for 

this program. We then divided the 

benefit under the EPGCS by MTZ’s total 

exports to determine a subsidy of 51.88 

percent ad valorem for MTZ. 

4. Duty Entitlement Passbook Scheme 

(DEPS/DEPB) 

India’s DEPS was enacted on April 1, 

1997, as a successor to the Passbook 

Scheme (PBS). As with PBS, the DEPS 

program 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 

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 

exported product. DEPS credits are 

valid for twelve months and are 

transferable after the foreign exchange is 

realized from the export sales on which 

the DEPS credits are earned. 

The Department has previously 

determined that the DEPS program is 

countervailable. See, e.g., PET Film 

Final Determination, 67 FR 34905, at 

‘‘DEPS.’’ In the investigation, the 

Department determined that under 

DEPS, 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. Moreover, the GOI 

does not have in place and does not 

apply a system that is reasonable and 

effective to confirm which inputs, and 

in what amounts, are consumed in the 

production of the exported products. Id. 

Therefore, under 19 CFR 351.519(a)(4) 

and section 771(5)(E) of the Act, the 

entire amount of import duty exemption 

earned during the POI constitutes a 

benefit. Finally, this program can only 

be used by exporters and, therefore, it is 

specific under section 771(5A)(B) of the 

Act. Id. No new information or evidence 

of changed circumstances has been 

presented in this review to warrant 

reconsideration of this finding. 

Therefore, we continue to find that the 

DEPS is countervailable. 

In accordance with past practice and 

pursuant to 19 CFR 351.519(b)(2), we 

find that benefits from the DEPS are 

conferred as of the date of exportation 

of the shipment for which the pertinent 

DEPS credits are earned. See, e.g., Final 

Affirmative Countervailing Duty 

Determination: Certain Cut–to-Length 

Carbon–Quality Steel Plate From India, 

64 FR 73131, 73134 (December 29, 

1999), and accompanying Issues and 

Decision Memorandum, at Comment 4 

(Final Determination Carbon Steel Plate 

from India). We calculated the benefit 

on an ‘‘as–earned’’ basis upon export 

because DEPS credits are provided as a 

percentage of the value of the exported 

merchandise on a shipment–byshipment basis and, as such, it is at this 

point that recipients know the exact 

amount of the benefit (e.g., the duty 

exemption). 

MTZ reported that it received post–

export credits on PET film under the 

DEPS program during the POR. Because 

DEPS credits are earned on a shipment–

by-shipment basis, we normally 

calculate the subsidy rate by dividing 

the benefit earned on subject 

merchandise exported to the United 

States by total exports of subject 

merchandise to the United States during 

the POR. See, e.g., id. 64 FR at 73134. 

The DEPS licenses and supporting 

documentation provided by MTZ 

indicate that benefits were earned on 

both subject and non–subject 

merchandise. Although MTZ was able 

to separate the DEPS credits earned on 

exports to the United States in the data 

provided to the Department, it did not 

provide the supporting documentation 

establishing the destination of the 

shipments on which the DEPS credits 

were earned. However, MTZ provided 

supporting documentation for each 

DEPS license, indicating whether the 

DEPS credit was earned on subject or 

non–subject merchandise. Therefore, we 

calculated the DEPS program rate using 

the value of total post–export credits 

that MTZ earned for its export 

shipments of subject merchandise 

during the POR. We divided the total 

amount of the benefit by MTZ’s total 

exports of subject merchandise during 

the POR. On this basis, we preliminarily 

determine MTZ’s countervailable 

subsidy from the DEPS program to be 

3.40 percent ad valorem. 

5. Union Territories Central Sales Tax 

(CST) Program 

In the previous review, MTZ reported 

that a supplier located in a Union 

Territory did not collect any tax on 

MTZ’s purchases because companies 

located in that Union Territory are 

exempt from charging CST. Based on 

analysis of the information on the 

record, the Department determined that 

a financial contribution, in the form of 

tax revenue forgone, as defined under 

section 771(5)(D)(ii) of the Act, is 

provided by the GOI under the Union 

Territories CST exemption program. The 

benefit equals the amount of sales taxes 

not paid by MTZ on its purchases, in 

accordance with to section 771(5)(E) of 

the Act. Pursuant to section 

771(5A)(D)(iv) of the Act, this program 

is de jure specific because it is 

administered by the central government 

and is limited by law to certain 

geographical regions (i.e., Union 

Territories) within India. See PET Film 

Final Results of 2005 Review, 73 FR 

7708, at ‘‘Union Territories Central 

Sales Tax (CST) Program.’’ The CST 

program also provides a recurring 

benefit under 19 CFR 351.510(c) and 19 

CFR 351.524(c). 

In this POR MTZ purchased from a 

supplier located in a Union Territory. 

To calculate the benefit for MTZ under 

this program, we first calculated the 

total amount of CST that MTZ would 

have paid on its purchases from 

suppliers located in a Union Territory 

during the POR absent this program. We 

then divided this amount by MTZ’s total 

sales during the POR. On this basis, we 

determine the subsidy rate under this 

program to be 1.57 percent ad valorem 

for MTZ. 

MTZ reported that the GOI has 

repealed the CST and is phasing out the 

CST in four stages, reducing it to zero 

percent by April 1, 2010. However, MTZ 

did not provide any supporting 

documentation, such as a copy of the 

law promulgated by the GOI, to 

demonstrate that the CST is being 

phased out and that there is no 

replacement program or residual 

benefits. Neither did MTZ request an 

adjustment of the cash deposit rate 

because of a program–wide change. We 

asked the GOI to provide the pertinent 

laws and regulations phasing out the 

CST. Instead, in its third supplemental 

response, the GOI provided the 

Department with a one–page excerpt of 

its 2008–2009 Budget that indicated the 

anticipated decline in revenue, needing 

to be reviewed on a monthly/quarterly 

basis. We further asked the GOI and 

MTZ to clarify whether there were 

residual benefits from the Union 

Territory CST program, or whether there 

was any replacement program 

implemented for the Union Territory 

CST program, to which the GOI 

responded that the CST was being 

phased out. However, it did not address 

whether there were any residual 

benefits remaining. MTZ responded that 

the CST ‘‘has been repealed and is being 

phased out in stages.’’ See MTZ’s First 

Supplemental Questionnaire Response, 

at 13. 


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5This ‘‘residual period’’ is specified in Form-109. 

6 MTZ’s First Supplemental Questionnaire 

Response, at Exhibit S1-16(A); and MTZ’s Second 

Supplemental Questionnaire Response, at Exhibit 

S2-9. 

Although MTZ and the GOI have 

reported that the CST is being phased 

out by April 1, 2010, they have not 

demonstrated this with sufficient 

information or documentation to enable 

the Department to measure the change 

in countervailable subsidies provided 

under this program. See 19 CFR 

351.526(a)(2). The Department measures 

the benefit as the tax savings on MTZ’s 

purchases during the POR; there is no 

information on the record to measure 

how MTZ’s tax savings have changed 

since the POR for purposes of adjusting 

the cash deposit rate. Therefore, for all 

of these reasons, there is no basis for the 

Department to determine that a 

program–wide change has occurred or 

to adjust the cash deposit rate pursuant 

to 19 CFR 351.526. 

6. State Sales Tax Incentive Programs –

State of Gujarat 

In the 2004 countervailing duty 

administrative review, the Department 

determined that various state 

governments in India grant exemptions 

to, or deferrals from, sales taxes in order 

to encourage regional development. See 

PET Film Final Results of 2004 Review, 

72 FR 6530, at ‘‘State Sales Tax 

Incentive Programs.’’ These incentives 

allow privately owned and partially 

privately owned (i.e., not 100 percent 

owned by the GOI) manufacturers in 

selected industries and located in the 

designated regions to sell goods without 

charging or collecting state sales taxes. 

The State of Gujarat (SOG) is one of the 

states offering these state sales tax 

incentive programs. As a result of this 

program, MTZ did not pay sales taxes 

on its purchases from suppliers located 

in the SOG during the POR. In the 

original countervailing duty 

investigation, we determined that the 

operation of these types of state sales tax 

programs confer a countervailable 

subsidy. See PET Film Final Results of 

2005 Review, 73 FR 7708, at ‘‘State 

Sales Tax Incentive Programs.’’ The 

financial contribution is the tax revenue 

foregone by the respective state 

governments pursuant to section 

771(5)(D)(ii) of the Act, and the benefit 

equals the amount of sales taxes not 

paid by MTZ pursuant to section 

771(5)(E) of the Act. Pursuant to section 

771(5A)(D)(iv) of the Act, these 

programs are de jure specific because 

they are limited to certain geographical 

regions within the respective states 

administering the programs. 

MTZ stated that the SOG sales tax 

incentive program was terminated 

effective April 1, 2006. However, MTZ 

reported taxes saved on purchases 

within the SOG for the entire POR. See 

MTZ’s Questionnaire Response, at 

Exhibit 17; and MTZ’s Third 

Supplemental Questionnaire Response, 

at Exhibit S3–1. Further, in response to 

the Department’s request to identify 

which taxes the ‘‘Tax Saved On 

Purchases’’ column header refers to, 

MTZ identified those taxes as part of the 

Gujarat Sales Tax Program for ‘‘Items 

Purchased in Gujarat from Registered 

Dealers.’’ See MTZ’s First Supplemental 

Questionnaire Response, at Exhibit S1–

15. To calculate the benefit, the 

Department normally calculates the 

total amount of state sales taxes 

respondent would have paid on its 

purchases during the POR absent these 

programs. The Department then divides 

this amount by respondent’s total sales 

during the POR. MTZ only reported the 

monthly total of taxes saved on 

purchases, and MTZ did not indicate 

whether these totals are net of the Gokul 

Gram Yojana (a development promotion 

scheme of the SOG, and a liability MTZ 

has to pay), or not. Thus, we have not 

included this tax in our calculations. 

For these preliminary results we 

calculated MTZ’s rate for this program 

by dividing the total amount of tax 

saved on purchases, as reported, by 

MTZ’s total sales. On this basis, we 

preliminarily determine the subsidy rate 

under this program to be 1.83 percent 

ad valorem for MTZ. 

In the current review, MTZ argues 

that the sales tax law in the SOG, under 

which MTZ did not pay or collect sales 

taxes, was repealed, and thus, the rate 

from this program should not be 

included in the cash deposit rate. See 

MTZ’s Questionnaire Response, at 25. 

Exhibit S2–9 of MTZ’s second 

supplemental response includes a copy 

of the Gujarat Government Gazette of 

March 22, 2006, stating that the Gujarat 

Value Added Tax Rules, 2006, which 

MTZ states replaces the Gujarat sales 

tax, shall be effective April 1, 2008. In 

the first, second and third supplemental 

questionnaires the Department asked 

MTZ to clarify whether there are any 

residual benefits for MTZ from this 

program. MTZ responded that the only 

benefit was an exemption from tax on 

purchases, and that any purchase made 

after the repeal of the tax would not 

have benefited from an exemption 

because the tax did not exist. 

In response to the Department’s third 

request for information, the GOI 

responded in its second supplemental 

questionnaire, at 12, that the Gujarat 

Sales Tax Act, 1969, has been repealed 

and the VAT Act, 2005, has been 

introduced. Thus, the GOI stated, the 

scheme no longer provides any benefit 

to a recipient, and no company 

exempted under the previous scheme 

accrues any benefit. In its third 

supplemental response, at 5, the GOI 

stated that the Gujarat VAT Rules, 2006, 

Rule 18A, made provisions for 

industrial units to carry forward the 

exemptions for the residual period.5

In a fourth supplemental 

questionnaire, the Department requested 

that the GOI provide a copy of the 

Gujarat VAT Rules, 2006, including 

Rule 18A. In addition, the Department 

asked the GOI whether MTZ has filed 

Form–109 in accordance with Rule 18A, 

to carry forward the exemptions for the 

residual period, and if so, to provide a 

copy of MTZ’s filing. The Department 

further asked the GOI to state how the 

SOG deals or intends to deal with the 

residual benefits originating from this 

program, other than Rule 18A, and 

whether the SOG intends to or has 

implemented any replacement 

program(s) for state sales tax incentive 

in the context of the value added tax 

(VAT) or otherwise. Based on the 

Department’s request, the GOI provided 

the Gujarat VAT Rules, 2006, including 

rule 18A, applicable to residual benefits 

under the program, on the record of this 

review. Additionally, the GOI provided 

the Department with Form–109, 

Application for Certificate of 

Entitlement, as filed by MTZ, on the 

record of this review. This document 

indicates MTZ’s residual benefits under 

the SOG Sales Tax program will 

continue for an extended period of time. 

See GOI’s Fourth Supplemental 

Questionnaire Response, at 8–19 (July 

18, 2008) (GOI’s Fourth Supplemental 

Questionnaire Response). 

The Department issued the same 

questions to MTZ, asking it to provide 

proof of payment of the VAT on all 

purchases during the POR, and to 

demonstrate that MTZ did not file 

Form–109 and did not participate in a 

replacement program. MTZ responded 

by providing the same supporting 

documentation as the GOI. See MTZ’s 

Fourth Supplemental Questionnaire 

Response, at Exhibits S3–2 and S3–3. 

As proof of termination of the Gujarat 

sales tax, MTZ provided the official act 

of the SOG in the form of the Gujarat 

Government Gazette, implementing the 

VAT with the Gujarat Value Added Tax 

Act, 2003, effective April 1, 2006, and 

announcing the repeal of the Gujarat 

Sales Tax Act, 1969, at section 100(1).6

However, the record shows that the 

existing state sales tax incentive 

program is providing residual benefits. 

Therefore, the Department preliminarily 


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determines that the conditions of 19 

CFR 351.526 have not been met, and no 

adjustment to the rate for cash deposit 

purposes is warranted. 

Programs Preliminarily Determined to 

be Not Used 

We preliminarily determine that MTZ 

did not apply for or receive benefits 

during the POR under the programs 

listed below: 

1. Duty Free Replenishment Certificate 

(DFRC) (GOI) 

2. Export Oriented Units (EOU) (GOI) 

3. Target Plus Scheme (GOI) 

4. Capital Subsidy (GOI) 

5. Exemption of Export Credit from 

Interest Taxes (GOI) 

6. Loan Guarantees from the GOI 

7. Income Tax Exemption Scheme 

(Sections 10A & 10B) (GOI) 

8. State Sales Tax Incentive Programs 

other than SOG 

9. State of Maharashtra (SOM) 

Electricity Duty Exemption 

10. State of Maharashtra (SOM) Capital 

Incentive Scheme 

11. Octroi Refund Scheme- SOM 

12. Waiving of Interest on Loan by 

SICOM Limited (SOM) 

13. State Sales Tax Incentives–Section 

4–A of the Uttar Pradesh Trade Tax Act 

14. State Sales Tax Incentive of 

Uttaranchel 

15. State of Uttar Pradesh Capital 

Incentive 

16. SOG Infrastructure Assistance 

Schemes 

17. Capital Incentive Scheme of 

Uttaranchel 

Preliminary Results of Administrative 

Review 

In accordance with 19 CFR 

351.221(b)(4)(i), we have calculated an 

individual subsidy rate for MTZ for the 

POR. We preliminarily determine the 

total countervailable subsidy to be 66.61 

percent ad valorem for MTZ. 

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 20.40 

percent ad valorem, the all–others rate 

made effective by the LTFV 

investigation. 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. 

The Department clarified its 

‘‘automatic assessment’’ regulation on 

May 6, 2003. See Antidumping and 

Countervailing Duty Proceedings: 

Assessment of Antidumping Duties, 68 

FR 23954 (May 6, 2003) (Assessment 

Policy Notice). This clarification applies 

to entries of subject merchandise during 

the POR produced by any company 

included in the final results of review 

for which the reviewed company did 

not know that the merchandise it sold 

to the intermediary (e.g., a reseller, 

trading company, or exporter) was 

destined for the United States. In such 

instances, the Department will instruct 

CBP to liquidate un–reviewed entries at 

the ‘‘all others’’ rate if there is no rate 

for the intermediary involved in the 

transaction. See id. 

Disclosure and Public Hearing 

We will disclose the calculations used 

in our analysis 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, 

Room 1870, 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. Unless the time 

period is extended by the Department, 

case briefs are to be submitted within 30 

days after the date of publication of this 

notice in the Federal Register. See 19 

CFR 351.309(c). Rebuttal briefs, which 

must be limited to arguments raised in 

case briefs, are to be submitted no later 

than five days after the time limit for 

filing case briefs. See 19 CFR 

351.309(d). 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. Further, we 

request that parties submitting written 

comments provide the Department with 

a diskette containing an electronic copy 

of the public version of such comments. 

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 

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: July 30, 2008. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E8–18220 Filed 8–6–04; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN 0648–XI67 

Amendment 2 to the Fishery 

Management Plan for U.S. West Coast 

Fisheries for Highly Migratory Species 

AGENCY: National Marine Fisheries 

Service, National Oceanic and 

Atmospheric Administration, 

Department of Commerce. 


sroberts on PROD1PC70 with NOTICES