Council Regulation (EC) No 1288/2006 of 25 August 2006 amending Regulation (EC) No 367/2006 imposing a definitive countervailing duty on imports of polyethylene terephthalate (PET) film originating in India following an expiry review pursuant to Article 18 of Regulation (EC) No 2026/97 and amending Regulation (EC) No 1676/2001 imposing a definitive anti-dumping duty on imports of polyethylene terephthalate (PET) film originating, inter alia , in India
Date: 2006-08-25
Institutions: Council of the European Union
Subjects: India, anti-dumping duty, countervailing charge, import, originating product, plastics, thin sheet

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1288/2006

of 25 August 2006

amending Regulation (EC) No 367/2006 imposing a definitive countervailing duty on imports of
polyethylene terephthalate (PET) film originating in India following an expiry review pursuant to
Article 18 of Regulation (EC) No 2026/97 and amending Regulation (EC) No 1676/2001 imposing a
definitive anti-dumping duty on imports of polyethylene terephthalate (PET) film originating,
inter alia, in India

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Regulation (EC) No 2026/1997 of 6
October 1997 on protection against subsidised imports from
countries not members of the European Community (1)
(the
basic Regulation) and, in particular, Article 19 thereof,

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (2) and, in
particular, Article 14(1) thereof,

Having regard to the proposal submitted by the Commission
after consulting the Advisory Committee,

Whereas:

A. PROCEDURE

I. Previous investigation and existing measures

(1)

(PET)

terephthalate

The Council, by Regulation (EC) No 2597/1999 (3),
imposed a definitive countervailing duty on imports of
polyethylene
film (the product
concerned) falling within CN codes ex 3920 62 19 and
ex 3920 62 90, originating in India. The investigation
which led to the adoption of that Regulation is here-
inafter referred as to the ‘original
investigation’. The
measures took the form of an ad valorem duty, ranging
between 3,8 % and 19,1 % imposed on imports from

(1) OJ L 288, 21.10.1997, p. 1. Regulation as last amended by Council

Regulation (EC) No 461/2004 (OJ L 77, 13.3.2004, p. 12).

(2) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Council
Regulation (EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17).

(3) OJ L 316, 10.12.1999, p. 1.

individually named exporters, with a residual duty rate
of 19,1 % imposed on imports of the product concerned
from all other companies. The countervailing duty
imposed on PET film manufactured and exported by
Garware Polyester Limited (Garware or the company)
investigation period was 1
was 3,8 %. The original
October 1997 to 30 September 1998.

The Council, by Regulation (EC) No 367/2006 (4), main-
tained the definitive countervailing duty imposed by
Regulation (EC) No 2597/1999 on imports of PET film
originating in India, following an expiry review pursuant
to Article 18 of the basic Regulation.

The Council, by Regulation (EC), No 366/2006 (5),
amended Regulation (EC) No 1676/2001 (6) following a
partial interim review of the level of anti-dumping duty
in force against five Indian producers and imposed an
anti-dumping duty ranging from 0 % to 18 %. The anti-
dumping duty imposed on imports of PET film from
Garware was 17,4 %. It is noted that the anti-dumping
duty rate for Garware was adjusted to take into account
the level of subsidisation countervailed by Regulation
(EC) No 367/2006 (see also recital 71 below).

II. Request for a partial interim review

A request for a partial interim review of Council Regu-
limited to the level of
lation (EC) No 2597/1999,
countervailing duty imposed on Garware was lodged by
the following Community producers: DuPont Teijin
Films, Mitsubishi Polyester Film GmbH, Nuroll SpA and
Toray Plastics Europe (the applicants). The applicants
the Community
represent
production of PET film.

a major proportion of

(2)

(3)

(4)

(4) OJ L 68, 8.3.2006, p. 15.
(5) OJ L 68, 8.3.2006, p. 6.
(6) OJ L 227, 23.8.2001, p. 1.

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(5)

(6)

(7)

(8)

(9)

The applicants alleged that, in regard to imports of PET
film from Garware, the level of existing countervailing
measures was no longer sufficient
the
injurious subsidisation, as the circumstances regarding
the subsidisation of Garware had changed significantly.

to counteract

III. Investigation

after

determined,

the Advisory
consulting
Having
Committee,
that sufficient evidence existed to justify
the initiation of a partial interim review, the Commission
announced on 12 July 2005, by a notice of initiation
published in the Official Journal of the European Union (1),
the initiation of a partial interim review, in accordance
with Article 19 of the basic Regulation.

The review is limited in scope to the examination of
subsidisation of one exporting producer, Garware,
in
order to assess the need for continuation, removal or
amendment of the level of the existing measures. The
investigation period ran from 1 April 2004 to 31
March 2005.

the

advised

officially

the Government of
the initiation of

The Commission
exporting
producer concerned,
India (GOI)
the partial
and the applicants of
interim review. Interested parties were given the oppor-
tunity to make their views known in writing and to
request a hearing within the time-limit set in the notice
of initiation.

the Commission sent

In order to obtain the information necessary for its inves-
to
tigation,
Garware, which cooperated by replying to the ques-
tionnaire. A verification visit was
at
Garware's premises in India.

a questionnaire

carried out

II. Like product

(12) As in the original

in India

investigation,

it was found that PET
film produced and sold by Garware on the domestic
market
and PET film exported to the
Community from India have the same basic physical
and technical characteristics and uses. Therefore,
they
are like products within the meaning of Article 1(5) of
the basic Regulation.

C. SUBSIDIES

I. Introduction

(13) On the basis of the information contained in the review
to the Commission's ques-
schemes, which allegedly

request and the replies
following
the
tionnaire,
involve the granting of subsidies, were investigated:

(a) N a t i o n w i d e s c h e m e s

(i) Advance
Order;

Licence

Scheme/Advance

Release

(ii) Duty Entitlement Passbook Scheme;

(iii) Special Economic Zones/Export Oriented Units

Scheme;

(iv) Export Promotion Capital Goods Scheme;

(v) income tax schemes

— Export Income Tax Exemption Scheme,

— Income Tax Incentive for Research and

Development;

(vi) Export Credit Scheme;

(vii) Duty-Free Replenishment Certificate.

(10) Garware, the GOI and the applicants were informed of
the investigation and had the

the essential results of
opportunity to comment (see recital 73 below).

(14)

B. PRODUCT CONCERNED AND LIKE PRODUCT

I. Product concerned

(11)

The product concerned is, as defined in the original
investigation, polyethylene terephthalate (PET) film, origi-
nating in India, normally declared under CN codes
ex 3920 62 19.

the GOI

to issue notifications

The schemes (i) to (iv) and (vii) above are based on the
Foreign Trade (Development and Regulation) Act 1992
(No 22 of 1992) which entered into force on 7 August
1992 (the Foreign Trade Act). The Foreign Trade Act
authorises
regarding
export and import policy. A five-year plan relating to
export and import policy for the period 1 April 2002
to 31 March 2007 was published by the GOI
(EXIM
policy 2002-07). In addition, a handbook of procedures
governing the EXIM policy 2002-07 (HOP I 2002-07)
was published by the GOI and is updated on a regular
basis (2).

(1) OJ C 172, 12.7.2005, p. 5.

(2) Notification No 1/2002-07 of 31.3.2002 of

the Ministry of

Commerce and Industry of the Government of India.

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(15)

The Income Tax Schemes specified in (v) above are based
on the Income Tax Act 1961, which is amended
annually by the Finance Act.

(16)

The Export Credit Scheme specified in (vi) above is based
on sections 21 and 35A of the Banking Regulation Act
1949, which allows the Reserve Bank of India to instruct
commercial banks regarding export credits.

(c) P r a c t i c a l

i m p l e m e n t a t i o n

(22) An eligible exporter can apply for DEPB credits, which
are calculated as a percentage of the value of products
exported under this scheme. Such DEPB rates have been
established by the Indian authorities for most products,
including the product concerned. They are determined on
the basis of standard input-output norms (SIONs), taking
into account a presumed import content of inputs in the
export product and the customs duty incidence on such
presumed imports, regardless of whether import duties
have actually been paid or not.

(b) R e g i o n a l s c h e m e s

(17) On the basis of the information contained in the review
request and the replies
to the Commission's ques-
tionnaire, the Commission also investigated the package
the
scheme of
Government of Maharashtra (the GOM) 1992. This
scheme is based on resolutions of the GOM Industries,
Energy and Labour Department.

the PSI) of

(hereinafter,

incentives

II. Nationwide schemes

1. Advance Licence Scheme (ALS)/Advance Release Order
(ARO)

(a) L e g a l b a s i s

(18)

The detailed description of the scheme is contained in
paragraphs 4.1.1 to 4.1.14 of the EXIM policy 2002-07
and chapters 4.1 to 4.30 of the HOP I 2002-07.

(b) E l i g i b i l i t y

(19) Garware was not found to be using the ALS/ARO during
the investigation period, therefore no further analysis of
the countervailability of this scheme is necessary.

(23)

To be eligible for benefits under this scheme, a company
must export. At the point in time of the export trans-
action, a declaration must be made by the exporter to the
authorities in India, indicating that the export is taking
place under the DEPBS. In order for the goods to be
exported,
the Indian customs authorities issue, during
the dispatch procedure, an export shipping bill. This
document shows, inter alia, the amount of DEPBS credit
which is to be granted for that export transaction. At this
point in time, the exporter knows the benefit he will
receive. Once the customs authorities issue an export
shipping bill,
the
granting of a DEPBS credit. The relevant DEPBS rate to
calculate the benefit is that which applied at the time the
export declaration was made. Therefore,
there is no
possibility of a retroactive amendment to the level of
the benefit.

the GOI has no discretion over

(24)

It was also found that,
in accordance with Indian
accounting standards, DEPBS credits can be booked on
an accruals basis as income in the commercial accounts,
upon fulfilment of the export obligation.

(25)

2. Duty Entitlement Passbook Scheme (DEPBS)

(a) L e g a l b a s i s

Such credits may be used for payment of customs duties
imports of any goods unrestrictedly
on subsequent
imported
goods. Goods
importable,
against
such credits can be sold on the domestic
market, subject to sales tax, or otherwise used.

capital

except

(20) A detailed description of DEPBS is

contained in
the EXIM policy 2002-07 and in
paragraph 4.3 of
the
Chapter 4 of HOP I 2002-07. At
original
investigation, two forms of DEPB existed: pre-
export and post-export. In April 2000, the pre-export
form of DEPB was discontinued and therefore only the
post-export form was investigated in the current review.

the time of

(26) DEPBS credits are freely transferable and valid for a

period of 12 months from the date of issue.

(b) E l i g i b i l i t y

(21) Any manufacturer-exporter or merchant-exporter

is
eligible for this scheme. Garware was found to benefit
from this scheme during the investigation period.

transactions or,

(27) An application for DEPBS credits can cover up to 25
an
if
export
unlimited amount of export transactions. De facto, no
strict deadlines to apply for DEPBS exist, because the
time periods mentioned in Chapter 4.47 HOP I 2002-
07 are always counted from the most recent export
transaction included in a given DEPBS application.

electronically

filed,

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(28)

to the Commission's attention
The company brought
that this scheme would soon be discontinued and be
replaced by an allegedly WTO compatible scheme with
effect
from 1 April 2006. The DEPB was originally
planned to expire on 1 April 2005. However, as the
replacement scheme was not ready to be implemented
by that date, the DEPBS was prolonged until 1 April
2006. No confirmation was given by the company
whether this new scheme has finally entered into force
after the latter date. In any event, this alleged change
would fall outside the review investigation period.

(d) C o n c l u s i o n s o n D E P B S

(29)

The DEPBS provides subsidies within the meaning of
Article 2(1)(a)(ii) and Article (2)2 of the basic Regulation.
A DEPBS credit is a financial contribution by the GOI,
since the credit will eventually be used to offset import
duties, thus decreasing the GOI's duty revenue which
would otherwise be due. In addition, the DEPBS credit
confers a benefit upon the exporter, because it improves
the liquidity of the company.

the benefit conferred on the
calculated in terms of
recipient, which is found to exist during the review inves-
tigation period. In this regard, it was considered that the
benefit is conferred on the recipient at the point in time
when an export transaction is made under this scheme.
At this moment, the GOI is liable to forego the customs
duties, which constitutes a financial contribution within
the meaning of Article 2(1)(a)(ii) of the basic Regulation.

(33)

In light of the above,
it is considered appropriate to
assess the benefit under the DEPBS as being the sum
of the credits earned on all export transactions made
under this scheme during the investigation period. The
company submitted that the rate applicable to the DEPBS
has been reduced from 11 % to 8 % with effect from 26
this alleged change falls outside the
i.e.,
May 2005,
review investigation period;
the effects and
relevance of this change could not be verified and this
claim must be rejected in accordance with Article 5 of
the basic Regulation.

therefore,

(30)

Further, the DEPBS is contingent in law upon export
performance, and therefore deemed to be specific and
countervailable under Article 3(4)(a) of the basic Regu-
lation.

(34)

Fees necessarily incurred to obtain the subsidy were
deducted from the credits received to arrive at
the
subsidy amount as the numerator, pursuant to Article
7(1)(a) of the basic Regulation.

(31)

inputs used. Moreover,

This scheme cannot be considered a permissible duty
substitution drawback system
drawback system or
the basic
within the meaning of Article 2(1)(a)(ii) of
Regulation. It does not conform to the strict rules laid
down in Annex I item (i), Annex II (definition and rules
for drawback) and Annex (III) (definition and rules for
substitution drawback) of
the basic Regulation. An
exporter is under no obligation to actually consume
the goods imported free of duty in the production
process and the amount of credit is not calculated in
relation to actual
there is no
system or procedure in place to confirm which inputs
are consumed in the production process of the exported
product or whether an excess payment of import duties
occurred within the meaning of item (i), Annex I and
Annexes II and III of the basic Regulation. Lastly, an
is eligible for DEPBS benefits regardless of
exporter
whether it imports any inputs at all. In order to obtain
the benefit,
for an exporter to simply
export goods without demonstrating that any input
material was
imported. Thus, even exporters which
procure all their inputs locally and do not import any
goods which can be used as inputs are still entitled to
benefit from DEPBS.

is sufficient

it

(35)

the appropriate denominator, as

In accordance with Article 7(2) of the basic Regulation,
the subsidy amount has been allocated over the total
export turnover during the review investigation period
as
the subsidy is
contingent on export performance and it was not
granted by reference to the quantities manufactured,
produced, exported or transported. Garware benefited
from this scheme during the investigation period and
obtained a subsidy of 10,3 %.

3. Export Oriented Unit Scheme (EOUS)/Special Economic
Zones Scheme (SEZS)

(a) L e g a l b a s i s

(36)

The details of these schemes are contained in Chapters 6
(EOUS) and 7 (SEZS) respectively of the EXIM policy
2002-07 and HOP I 2002-07.

(e) C a l c u l a t i o n o f

t h e s u b s i d y a m o u n t

(32)

In accordance with Articles 2(2) and 5 of the basic Regu-
the amount of countervailable subsidies was
lation,

(37) Garware was not found to be set up under either of these
therefore no

schemes during the investigation period,
further analysis of their countervailability is necessary.

(b) E l i g i b i l i t y

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4. Export Promotion Capital Goods Scheme (EPCGS)

(a) L e g a l b a s i s

(38) A detailed description of the EPCGS can be found in
Chapter 5, EXIM Policy 2002-07 and in Chapter 5,
HOP I 2002-07.

(b) E l i g i b i l i t y

(39) Any manufacturer-exporter and merchant-exporter tied
is
to a supporting manufacturer or service provider
eligible for this scheme. Garware was found to benefit
from this scheme during the investigation period.

(c) P r a c t i c a l

i m p l e m e n t a t i o n

(40) Under the condition of an export obligation, a company
is allowed to import capital goods (new and — since
April 2003 — second-hand capital goods up to 10
years' old) at a reduced rate of duty. To this end, the
GOI issues, upon application and the payment of a fee,
an EPCG licence. Since April 2000, the scheme provides
for a reduced import duty rate of 5 %, applicable to all
capital goods imported under the scheme. In order to
meet the export obligation, the imported capital goods
must be used to produce a certain amount of export
goods during a certain period.

(41)

(42)

(d) C o n c l u s i o n o n t h e E P C G S

The EPCGS provides subsidies within the meaning of
Article 2(1)(a)(ii) and Article 2(2) of the basic Regulation.
The duty reduction constitutes a financial contribution by
the GOI, since this concession decreases the GOI's duty
revenue which would otherwise be due. In addition, the
duty reduction confers a benefit upon the exporter
because the duties saved upon importation improve its
liquidity.

Further, the EPCGS is contingent in law upon export
performance, since such licences can not be obtained
without a commitment
is
deemed to be specific and countervailable under Article
3(4)(a) of the basic Regulation.

to export. Therefore,

it

the basic Regulation, because

they are not
(i) of
consumed in the production of the exported products.

(44)

(e) C a l c u l a t i o n o f

t h e s u b s i d y a m o u n t

The numerator was established as follows: the subsidy
amount was calculated, in accordance with Article 7(3)
of the basic Regulation, on the basis of unpaid customs
duty on imported capital goods spread over a period
which reflects the normal depreciation period of such
capital goods in the PET film industry.
Interest was
added to this amount in order to reflect the full value
of the benefit over time. Fees necessarily incurred to
obtain the subsidy were deducted,
in accordance with
Article 7(1)(a) of the basic Regulation.

(45)

this

In accordance with Article 7(2) and 7(3) of the basic
subsidy amount has been allocated
Regulation,
over the export turnover during the review investigation
period as the appropriate denominator, as the subsidy is
contingent upon export performance. The
subsidy
obtained by Garware is 1,8 %.

5. Income Tax Exemption Scheme (ITES)

(a) L e g a l b a s i s

(46)

The legal basis for this scheme is contained in the
Income Tax Act 1961, amended yearly by the Finance
Act. The latter sets out, every year, the basis for the
collection of taxes, as well as various exemptions and
deductions which can be claimed. Exporting companies
may claim income tax exemptions under sections 10A,
10B and 80HHC of the Income Tax Act 1961.

(b) P r a c t i c a l

i m p l e m e n t a t i o n

(47) As Garware was not

found to have availed of any
benefits under the ITES, no further analysis of the coun-
tervailability of this scheme is necessary.

6. Export Credit Scheme (ECS)

(a) L e g a l b a s i s

(43)

The scheme cannot be considered a permissible duty
substitution drawback system
drawback system or
within the meaning of Article 2(1)(a)(ii) of
the basic
Regulation. Capital goods are not covered by the scope
of such permissible systems, as set out in Annex I, item

(48)

The details of the scheme are set out in Master Circular
IECD No 5/04.02.01/2002-03 (Export Credit in Foreign
No
Currency)
Master
10/04.02.01/2003-04 (Rupee Export Credit) of
the
Reserve Bank of India (RBI), which is addressed to all
commercial banks in India.

Circular

IECD

and

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(b) E l i g i b i l i t y

(49) Manufacturing-exporters

are
eligible for this scheme. Garware was found to benefit
from this scheme during the investigation period.

and merchant-exporters

as

the

period

in accordance with Article 7(2) of

appropriate
review investigation
denominator
the
basic Regulation, as the subsidy is contingent upon
export performance and is not granted by reference to
quantities manufactured, produced, exported or trans-
ported. Garware availed of benefits under the ECS and
obtained a subsidy of 1,2 %.

(c) P r a c t i c a l

i m p l e m e n t a t i o n

to exporters at

(50) Under this scheme, the RBI sets mandatory ceilings on
interest rates applicable to export credits, both in Indian
rupees and in foreign exchange, which commercial banks
can charge an exporter ‘with a view to making credit
internationally competitive
available
rates’. The ECS consists of two sub-schemes, the Pre-
Shipment Export Credit Scheme (packing credit), which
covers credits provided to an exporter for financing the
purchase, processing, manufacturing, packing and/or
shipping of goods prior
to export, and the Post-
Shipment Export Credit Scheme, which provides for
working capital
loans for financing export receivables.
The RBI also directs the banks to provide a certain
amount of their net bank credit towards export finance.

7. Duty-Free Replenishment Certificate (DFRC)

(a) L e g a l b a s i s

(54)

The legal basis for this scheme is contained in paragraphs
4.2.1 to 4.2.7 of the EXIM Policy 2002-07 and in para-
graphs 4.31 to 4.36 of the HOP I 2002-07.

(b) P r a c t i c a l

I m p l e m e n t a t i o n

(55) As Garware was not

found to have availed of any
benefits under the DFRC, no further analysis of the coun-
tervailability of this scheme is necessary.

(51) As a result of these RBI Master Circulars, exporters can
obtain export
rates
compared to the interest rates on ordinary commercial
credit
set under market
conditions.

(cash credits), which are

at preferential

interest

credit

(d) C o n c l u s i o n o n t h e E C S

(56)

(52)

rates,

interest

the above preferential

Firstly, by lowering financing costs as compared with
market
interest
rates confer a benefit within the meaning of Article
2(2) of the basic Regulation on such exporters. Despite
the fact that the preferential credits under the ECS are
granted by commercial banks, this benefit is a financial
contribution by a government within the meaning of
Article 2(1)(iv) of the basic Regulation. The RBI
is a
public body, falling, therefore, within the definition of
a ‘government’ set out in Article 1(3) of the basic Regu-
lation and it instructs commercial banks to grant prefer-
ential financing to exporting companies. This preferential
financing amounts to a subsidy, which is deemed to be
specific and countervailable since the preferential interest
rates are contingent upon export performance, pursuant
to Article 3(4)(a) of the basic Regulation.

(57)

(e) C a l c u l a t i o n o f

t h e s u b s i d y a m o u n t

(53)

The subsidy amount has been calculated on the basis of
the difference between the interest paid for export credits
used during the investigation period and the amount that
would have been payable if market interest rates were
charged, as for ordinary commercial credits used by the
(numerator) has been
company. The subsidy amount
turnover during the
the total export
allocated over

III. Regional schemes

Package Scheme of

Incentives (PSI) of
Maharashtra (GOM)

the Government of

(a) L e g a l b a s i s

the State,

In order to encourage the dispersal of industries to less
developed areas of the State, the GOM has been granting
incentives to new expansion units set up in developing
regions of
since 1964, under a scheme
commonly known as the ‘Package Scheme of Incentives’.
The scheme has been amended several times since its
introduction and the 1993 scheme was operative from
1 October 1993 to 31 March 2001, whereas the latest
amendment, the 2001 scheme, was introduced on 31
March 2001 and foreseen to be operative up to 31
the GOM is composed of
March 2006. The PSI of
several
the main being the exemption
sub-schemes,
from local sales tax and the refund of octroi tax.

(b) E l i g i b i l i t y

scale

large

in expansion or diversification of

In order to be eligible, companies must invest in less
developed areas, either by setting up a new industrial
capital
establishment or by making a
investment
an
existing industrial establishment. These areas are clas-
into
sified, according to their economic development,
different categories
lesser
area). The main
developed
criterion to establish the amount of
incentives is the
area in which the enterprise is or will be located and
the size of the investment.

less developed area,

developed

area,

(e.g.,

least

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(58)

(59)

(60)

(61)

(c) P r a c t i c a l

i m p l e m e n t a t i o n

to central sales tax (for

Exemption from local sales tax: Goods are normally
subject
inter-State sales) or
State sales tax (for intra-State sales) at varying levels,
in which transactions are
depending upon the State(s)
being made. There is no sales tax on the import or
export of goods, while domestic sales are subject to the
sales tax at the applicable rates. Under the exemption
scheme, designated units are not required to collect any
sales tax on their sales transactions. Similarly, designated
units are exempted from payment of the local sales tax
on their purchases of goods from a supplier itself eligible
for the scheme. Whereas the sales transaction does not
confer any benefit on the designated selling unit, the
purchase transaction does confer a benefit
to the
designated purchasing unit. Garware was found to have
benefited from this exemption during the investigation
period.

Refund of the Octroi Tax: Octroi is a tax levied by local
Governments in India, including the GOM, on goods that
enter the territorial limits of a town or district. Industrial
enterprises are entitled to a refund of the octroi tax from
the GOM, if their facility is located in certain specified
towns and districts within the territory of the State. The
total amount that may be refunded is restricted to 100 %
of the fixed capital
investment. Garware was found to
have benefited from this refund during the investigation
period.

(d) C o n c l u s i o n o n t h e P S I o f

t h e G O M

the GOM provides subsidies within the
The PSI of
the
meaning of Article 2(1)(a)(ii) and Article 2(2) of
basic Regulation. The
examined
constitute a financial contribution by the GOM, since
revenue which
this concession decreases the GOM's
In addition, this exemption/
would be otherwise due.
refund confers a benefit upon the company, as
it
improves its liquidity.

two sub-schemes

The company submitted that the sales tax was abolished
on 1 April 2005 and that the GOM has since introduced
a value added tax regime, under which the company is
obliged to pay the full rate. However, this alleged change
occurred after
the investigation period,
therefore the effects and relevance of this change could
not be verified. In any event, no relevant evidence was
submitted relating to the regime and the company's obli-
gations thereunder. In accordance with Article 5 of the
basic Regulation, this claim has to be rejected.

the end of

(62)

The scheme is only available to companies which have
invested within certain designated geographical areas
within the jurisdiction of the State of Maharashtra. It is

not available to companies located outside these areas.
The level of the benefit is different according to the area
in accordance with
concerned. The scheme is specific,
Articles 3(2)(a) and 3(3) of
the basic Regulation and
therefore countervailable.

(e) C a l c u l a t i o n o f

t h e s u b s i d y a m o u n t

the

under

remained

Concerning the tax exemption, the subsidy amount was
calculated on the basis of
the amount of sales tax
normally due during the review investigation period,
scheme.
unpaid
but which
Similarly, as far as octroi
is concerned, the benefit to
the exporter was calculated as the amount of octroi tax
refunded during the investigation period. Pursuant
to
Article 7(2) of the basic Regulation, these amounts of
subsidy (numerator) have then been allocated over the
total sales during the review investigation period as the
appropriate denominator, as the subsidy is not export
contingent and it was not granted by reference to the
quantities manufactured, produced, exported or trans-
ported. During this period, Garware benefited from
these schemes and obtained subsidies of 1,6 %.

IV. Amount of countervailable subsidies

The amount of countervailable subsidies determined in
accordance with the basic Regulation, expressed ad
valorem,
is
14,9 %. This amount of subsidisation exceeds the de
minimis threshold mentioned under Article 14(5) of the
basic Regulation.

investigated exporting producer

the

for

Scheme

DEPB

EPCG

Garware

10,3

1,8

(in %)

Total

PSI of
GOM

1,6

14,9

ECS

1,2

It is therefore considered that, pursuant to Article 19 of
the basic Regulation, the measures currently in force are
the countervailable
to counteract
no longer sufficient
subsidies which
the
causing
Community industry.

injury

the

are

to

(63)

(64)

(65)

V. Lasting nature of changed circumstances with
regard to subsidisation

(66)

In accordance with Article 19(2) of the basic Regulation,
it was examined whether the continuation of the existing
measure would not be sufficient to counteract the coun-
tervailable subsidy which is causing injury.

L 236/8

EN

Official Journal of the European Union

31.8.2006

(67)

tax refund,

there is no allegation that

It was established that, during the investigation period,
Garware continued to benefit from countervailable subsi-
disation by the Indian authorities. Further, the subsidy
rate found during this review is considerably higher
investigation.
than that established during the original
The subsidy schemes analysed above give recurring
the DEPBS and the
benefits. With the exception of
sales
these
programmes will be phased out
in the foreseeable
future. According to Garware, a replacement scheme to
the DEPBS was planned to enter into force on 1 April
2006. No confirmation was given by the company
whether this in fact took place. The situation arising
from the replacement of
the DEBPS by an allegedly
WTO compatible scheme, on which the Commission
has no information, will have to be assessed in due
time.
In the absence of any substantiated evidence of
the replacement of the DEBPS, it is considered that, for
the need of the present review, the DEPBS is still in place.
Similarly, the company did not provide any details of the
VAT-like scheme which allegedly replaced the sales tax in
the GOM after the end of the investigation period and
therefore it was considered that,
for the need of the
present review, the sales tax scheme is still in place.

(68)

Since it has been demonstrated that the company is in
receipt of much higher subsidisation than before and that
it is likely to continue to receive subsidies of an amount
higher than determined in the original investigation, it is
concluded that the continuation of the existing measure
is not sufficient to counteract the countervailable subsidy
causing injury and that the level of the measures should
therefore be amended to reflect the new findings.

VI. Conclusion

(69)

In view of the conclusions reached with regard to the
level of subsidisation of Garware and the insufficiency of
the current measures to counteract the countervailable
subsidies found,
the countervailing duty on Garware
imports of the product concerned should be amended
in order to reflect the new subsidisation levels found.

(70)

The amended countervailing duty set out in recital 72
was established at the new rate of subsidisation found
during the present review, as the injury margin calculated
in the original investigation remains higher.

(71)

Since, pursuant to Article 24(1) of the basic Regulation
and Article 14(1) of Regulation (EC) No 384/96, no
product
to both anti-dumping and
countervailing duties for the purpose of dealing with
one and the same situation arising from dumping or
countervailing duty
from export

shall be subject

subsidisation,

the

(13,3 %)

this
subsidies

review investigation to
found as a result of
correspond to export
shall be
deducted from the anti-dumping duty imposed on
Garware by Regulation (EC) No 1676/2001. Following
the amendment to the latter, introduced by Regulation
(EC) No 366/2006, a dumping margin of 20,1 % was
established for Garware. Of that, 2,7 % was deducted to
reflect
the countervailing duty then in force corre-
sponding to export subsidies and thus an anti-dumping
duty of 17,4 % was imposed on that company. As a
result of the current review, a further 10,6 % shall be
deducted
duty,
individual
reflecting the
countervailing duty corresponding to
export subsidies found; the anti-dumping duty imposed
on Garware should thus be reduced by that amount to
6,8 %.

anti-dumping

from its

(72) On the basis of the above, the proposed duty amounts
concerning Garware, expressed on the CIF Community
border price, customs duty unpaid, are as follows:

Export
subsidy
margin

Total
subsidy
margin

Dumping
margin

CVD
duty

AD
duty

Total
duty rate

(in %)

Garware

13,3

14,9

20,1

14,9

6,8

21,7

(73) Garware, the GOI and the applicants were informed of
the essential
facts and considerations on the basis of
which it was intended to recommend the amendment
of the measures in force and had the opportunity to
comment. No comments were received by Garware or
their
the GOI;
agreement with the
the
Commission.

conclusions

comments

applicant's

reached

reflect

the

by

(74)

the present

review. They

review with respect

The individual company countervailing and anti-dumping
duty rates specified in this Regulation were established on
the basis of the findings of the investigations which led
to the adoption of Regulation (EC) No 367/2006 and
the
Regulation (EC) No 366/2006, as well as of
the
findings of
reflect
situation found during this
to
Garware. These duty rates (as opposed to the country-
wide duty applicable to all other companies) are thus
exclusively applicable to imports of products originating
the
in the
and thus by the
companies
entities
mentioned.
Imported products produced by any other
company not specifically mentioned in the operative
this Regulation with its name and address,
part of
including
specifically
to
mentioned, cannot benefit
from these rates and shall
be subject
to the duty rate applicable to all other
companies.

concerned and produced by

country

specific

entities

related

those

legal

31.8.2006

EN

Official Journal of the European Union

L 236/9

(75) Any claim requesting the application of these individual company countervailing and anti-dumping
duty rates (e.g. following a change in the name of the entity or following the setting up of new
production or sales entities) should be addressed to the Commission (1) forthwith with all relevant
information, in particular any modification in the company's activities linked to production, domestic
and export sales associated with, for example, that name change or that change in the production
and sales entities,

HAS ADOPTED THIS REGULATION:

Article 1

Article 1(2) of Council Regulation (EC) No 367/2006 shall be replaced by the following:

The rate of the duty applicable to the net free-at-Community-frontier price, before duty for imports

‘2.
produced in India by the companies listed below, shall be as follows:

Country

Company

Definitive duty
(%)

TARIC
additional code

India

India

India

India

India

India

India

Ester Industries Limited, 75-76, Amrit Nagar, Behind South Extension
Part-1, New Delhi 110 003, India

12,0

A026

Flex Industries Limited, A-1, Sector 60, Noida 201 301 (UP), India

12,5

Garware Polyester Limited, Garware House, 50-A, Swami Nityanand
Marg, Vile Parle (East), Mumbai 400 057, India

14,9

India Polyfilms Limited, 112 Indra Prakash Building, 21 Barakhamba
Road, New Delhi 110 001, India

Jindal Poly Films Limited, 56 Hanuman Road, New Delhi 110 001,
India

MTZ Polyfilms Limited, New India Centre, 5th Floor, 17 Co-operage
Road, Mumbai 400 039, India

7,0

7,0

8,7

A027

A028

A029

A030

A031

Polyplex Corporation Limited, B-37, Sector-1, Noida 201 301, Dist.
Gautam Budh Nagar, Uttar Pradesh, India

19,1

A032

India

All other companies

19,1

A999’

Article 2

Article 1(2) of Council Regulation (EC) No 1676/2001 shall be replaced by the following:

The rate of the definitive anti-dumping duty applicable to the net free-at-Community-frontier price,

‘2.
before duty, shall be as follows for products originating in:

Country

India

Company

Definitive duty
(%)

TARIC
additional code

Ester Industries Limited, 75-76, Amrit Nagar, Behind South Extension
Part-1, New Delhi 110 003, India

17,3

A026

India

Flex Industries Limited, A-1, Sector 60, Noida 201 301 (U.P.), India

0,0

A027

(1) European Commission, Directorate General for Trade, Directorate B, J-79 5/17, Rue de la Loi/Wetstraat 200, B-1049

Brussels.

L 236/10

EN

Official Journal of the European Union

31.8.2006

Country

Company

Garware Polyester Limited, Garware House, 50-A, Swami Nityanand
Marg, Vile Parle (East), Mumbai 400 057, India

Jindal Poly Films Limited, 56 Hanuman Road, New Delhi 110 001,
India

Definitive duty
(%)

TARIC
additional code

6,8

0,0

A028

A030

MTZ Polyfilms Limited, New India Centre, 5th Floor, 17 Co-operage
Road, Mumbai 400 039, India

18,0

A031

Polyplex Corporation Limited, B-37, Sector-1, Noida 201 301, Dist.
Gautam Budh Nagar, Uttar Pradesh, India

0,0

A032

All other companies

Kolon Industries Inc., Kolon Tower, 1-23, Byulyang-dong, Kwacheon-
city, Kyunggi-do, Korea

SKC Co. Ltd, Kyobo Gangnam Tower, 1303-22, Seocho 4 Dong,
Seocho Gu, Seoul 137-074, Korea

Toray Saehan Inc. 17F, LG Mapo B/D, 275 Kongdug-Dong, Mapo-
Gu, Seoul 121-721, Korea

HS Industries Co. Ltd, Kangnam Building 5th Floor, 1321, Seocho-
Dong, Seocho-Ku, Seoul, Korea

Hyosung Corporation, 450, Kongduk-Dong, Mapo-Ku, Seoul, Korea

KP Chemical Corporation, No 89-4, Kyungun-Dong, Chongro-Ku,
Seoul, Korea

17,3

0,0

7,5

0,0

7,5

7,5

7,5

A999

A244

A224

A222

A226

A225

A223

India

India

India

India

India

Korea

Korea

Korea

Korea

Korea

Korea

Korea

All other companies

13,4

A999’

This Regulation shall enter into force on the day following its publication in the Official Journal of the
European Union.

Article 3

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 25 August 2006.

For the Council
The President

E. TUOMIOJA