Proposal for a Council Regulation Amending Regulation (EC) No 367/2006 imposing a definitive countervailing duty on imports of polyethylene terephthalate (PET) film originating in India
Date: 2007-08-31
Institutions: European Commission
Subjects: India, anti-dumping legislation, countervailing charge, import, originating product, plastics, thin sheet

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 31.8.2007 
COM(2007) 490 final 

Proposal for a 

COUNCIL REGULATION 

Amending Regulation (EC) No 367/2006 imposing a definitive countervailing duty on 
imports of polyethylene terephthalate (PET) film originating in India  

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

This proposal concerns the application of Council Regulation (EC) No 2026/1997 on 
protection  against  subsidised  imports  from  countries  not  members  of  the  European 
Community,  as  last  amended  by  Council  Regulation  (EC)  No 461/2004  (‘basic 
Regulation’) in the proceeding concerning imports of polyethylene terephthalate (PET) 
film from India..  

•  General context 

This proposal is made in the context of the implementation of the basic Regulation as is 
the  result  of  an  investigation  which  was  carried  out  in  line  with  the  substantive  and 
procedural requirements laid out in the basic Regulation. 

•  Existing provisions in the area of the proposal 

The  Council,  by  Regulation  (EC)  No  2597/1999  (OJ  L  316,  10.12.1999),  imposed  a 
definitive countervailing duty on imports of PET film falling within codes ex 3920 62 
19 and ex 3920 62 90 and originating in India.  

Following an expiry review pursuant to Article 18 of the basic Regulation, the Council 
imposed a definitive countervailing duty on imports of PET film originating in India by 
Regulation (EC) No367/2006 (OJ L 68, 8.3.2006, p.15).  

Following  a  partial  interim  review,  the  Council  amended  Regulation  (EC)  No 
1676/2001  imposing  a  definitive  anti-dumping  duty  on  imports  of  PET  film 
originating, inter alia, in India, by Regulation (EC) No 366/2006 (OJ L 68, 8.3.2006, 
p.6). 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Interested  parties  concerned  by  the  proceeding  have  already  had  the  possibility  to 
defend their interests, in line with the provisions of the basic Regulation. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

This proposal is the result of the implementation of the basic Regulation. 

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The  basic  Regulation  does  not  foresee  a  general  impact  assessment,  but  contains  an 
exhaustive list of conditions that have to be assessed. 

3)  LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

As  it  had  prima  facie  evidence  of  the  existence  of  increased  subsidisation,  on  2nd 
August  2006,  the  Commission  initiated  an  ex  officio  partial  interim  review  of  the 
countervailing  duties  in  force  in  respect  of  imports  of  PET  film  originating  in  India. 
The  purpose  of  this  review,  which  was  limited  in  scope  to  the  examination  of  the 
subsidisation  of  one  Indian  exporting  producer,  namely  Jindal  Poly  Film  Limited 
("Jindal"),  was  to  assess  whether  the  level  of  countervailing  duty  in  force  was 
sufficient to counteract the subsidisation causing injury. 

The  review  investigation  confirmed  that  Jindal  did  receive  higher  levels  of 
subsidisation than those established in the original investigation, in particular under the 
Advance  Licence  Scheme,  the  Export  Oriented  Units  Scheme  and  the  Export 
Promotion Capital Goods Scheme. It is thus proposed that the level of countervailing 
duty is increased in accordance with the findings of this investigation. 

As  the  level  of  anti-dumping  duty  established  by  Regulation  (EC)  No  366/2006  for 
Jindal  was  0%,  no  corresponding  amendment  would  need  to  be  made  to  that 
Regulation.  

•  Legal basis 

Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection  against 
subsidised  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Council Regulation (EC) No 461/2004 of 8 March 2004. 

•  Subsidiarity principle 

The proposal falls under the exclusive competence of the Community. The subsidiarity 
principle therefore does not apply. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reasons. 

The form of action is described in the above-mentioned basic Regulation and leaves no 
scope for national decision. 

Indications of how financial and administrative burdens falling upon the Community, 
national  governments,  regional  and  local  authorities,  economic  operators  and  citizens 
are minimized and proportionate to the objective of the proposal are not applicable. 

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•  Choice of instruments 

Proposed instruments: regulation. 

Other  means  would  not  be  adequate  because  the  basic  Regulation  does  not  foresee 
alternative options. 

4)  BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

Amending Regulation (EC) No 367/2006 imposing a definitive countervailing duty on 
imports of polyethylene terephthalate (PET) film originating in India  

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection 
against subsidised imports from countries not members of the European Community1 (‘basic 
Regulation’), 

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

Whereas: 

I. 

Previous investigation and existing measures 

A. 

PROCEDURE 

(1) 

The Council, by Regulation (EC) No 2597/19992, imposed a definitive countervailing 
duty on imports of polyethylene terephthalate (‘PET’) film falling within CN codes ex 
3920  62  19  and  ex  3920  62  90,  originating  in  India  (the  ‘product  concerned’).  The 
investigation which led to the adoption of that Regulation is hereinafter referred to as 
the  ‘original  investigation’.  The  measures  took  the  form  of  an  ad  valorem  duty, 
ranging  between  3,8  %  and  19,1  %  imposed  on  imports  from  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 imports of 
PET  film manufactured and exported by Jindal Poly Films Limited,  formerly known 
as  Jindal  Polyester  Ltd3,  (‘Jindal’  or  ‘the  company’)  was  7  %.  The  original 
investigation period was 1 October 1997 to 30 September 1998. 

(2) 

The Council, by Regulation (EC) No 367/20064, following an expiry review pursuant 
to  Article  18  of  the  basic  Regulation,  maintained  the  definitive  countervailing  duty 
imposed  by  Regulation  (EC)  No  2597/1999  on  imports  of  PET  film  originating  in 
India. The review investigation period was 1 October 2003 to 30 September 2004. 

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OJ  L  288,  21.10.1997,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  461/2004  (OJ  L  77, 
13.3.2004, p. 12). 
OJ L 316, 10.12.1999, p. 1. 
OJ C 297, 2.12.2004, p. 2. 
OJ L 68, 8.3.2006, p. 15. 

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(3) 

The  Council,  by  Regulation  (EC)  No  1288/20065,  following  an  interim  review 
concerning the subsidisation of another Indian PET film producer, Garware Polyester 
Limited ('Garware'), amended the definitive countervailing duty imposed on Garware 
by Regulation (EC) No 367/2006. 

II. 

Ex officio initiation of a partial interim review 

(4) 

Prima facie evidence was available to the Commission indicating that Jindal benefited 
from increased levels of subsidisation, compared to the original investigation, and that 
the changes to such levels were of a lasting nature. 

III. 

Investigation 

(5) 

(6) 

(7) 

(8) 

(9) 

As  a  result,  the  Commission  decided,  after  consulting  the  Advisory  Committee,  to 
initiate  ex  officio  a  partial  interim  review  in  accordance  with  Article  19  of  the  basic 
Regulation, limited to the level of subsidisation to Jindal, in order to assess the need 
for the continuation, removal or amendment of the existing countervailing measures. 
On 2 August 2006 the Commission announced, by a notice of initiation published in 
the Official Journal of the European Union6, the initiation of this review. 

The review investigation period ('review IP') ran from 1 April 2005 to 31 March 2006. 

The  Commission  officially  advised  Jindal,  the  Government  of  India  ('GOI')  and  Du 
Pont  Tejin  Films,  Luxembourg,  Mitsubishi  Polyester  Film,  Germany,  Toray  Plastics 
Europe,  France  and  Nuroll,  Italy,  which  represent  the  overwhelming  majority  of 
Community  PET  film  production  (hereinafter  'the  Community  industry'),  of  the 
initiation of the partial interim review. Interested parties were given the opportunity to 
make their views known in writing and to request a hearing within the time limit set in 
the notice of initiation. 

In order to obtain the information necessary for its investigation, the Commission sent 
a  questionnaire  to  Jindal,  which  cooperated  by  replying  to  the  questionnaire.  A 
verification visit was carried out at Jindal’s premises in India. 

Jindal, the GOI and the Community industry were informed of the essential results of 
the  investigation  and  had  the  opportunity  to  comment.  Comments  were  received  by 
Jindal and are discussed below. The GOI did not submit any comments. 

B. PRODUCT CONCERNED 

(10)  The product concerned is polyethylene terephthalate (PET) film, originating in India, 
normally declared under CN codes ex 3920 62 19 and ex 3920 62 90, as defined in the 
original investigation. 

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OJ L 236, 31.8.2006, p. 1. 
OJ C 180, 2.8.2006, p. 90. 

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I. 

Introduction 

C. SUBSIDIES 

(11)  On  the  basis  of  the  information  available  and  the  reply  to  the  Commission’s 
questionnaire,  the  following  schemes,  allegedly  involving  the  granting  of  subsidies, 
were investigated: 

(a)  Nationwide Schemes: 

(i)  Advance Licence Scheme; 

(ii)  Duty Entitlement Passbook Scheme; 

(iii)  Export Oriented Units Scheme/Special Economic Zones Scheme; 

(iv)  Export Promotion Capital Goods Scheme; 

(v)  Export Income Tax Exemption Scheme; 

(vi)  Export Credit Scheme; 

(vii)  Duty-Free Replenishment Certificate.  

(12)  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  7th  August 
1992  (the  ‘Foreign  Trade  Act’).  The  Foreign  Trade  Act  authorises  the  GOI  to  issue 
notifications  regarding  export  and  import  policy.  A  multi-annual  plan  relating  to  the 
Indian foreign trade policy for the period 1 September 2004 to 31 March 2009, which 
succeeded  the  former  export  and  import  (EXIM)  policy,  was  published  by  the  GOI 
(‘FTP  2004-09’).  In  addition,  a  handbook  of  procedures  governing  the  FTP  2004-09 
(‘HOP I 2004-09’) was published by the GOI and is updated on a regular basis7.  

(13)  The  Export  Income  Tax  Exemption  Scheme  specified  in  (v)  above  is  based  on  the 

Income Tax Act 1961, which is amended annually by the Finance Act. 

(14)  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. 

(b)  Regional Schemes  

(15)  On  the  basis  of  the  information  available  and  the  reply  to  the  Commission’s 
questionnaire,  the  Commission  also  investigated  the  Package  Scheme  of  Incentives 
(hereinafter,  the  ‘PSI’)  of  the  Government  of  Maharashtra  (the  ‘GOM’)  1993.  This 
scheme  is  based  on  resolutions  of  the  GOM  Industries,  Energy  and  Labour 
Department. 

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Notification No 1(RE-2006)/2004-2009 of 7.4.2006 of the Ministry of Commerce and Industry of the 
Government of India. 

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II. 

Nationwide Schemes 

1. 

Advance Licence Scheme (‘ALS’) 

(a)  Legal basis 

(16)  The detailed description of the scheme is contained in paragraphs 4.1.3 to 4.1.14 of the 
FTP-policy 2004-09 and chapters 4.1 to 4.30 of the HOP I 2004-09. The scheme was 
replaced  in  April  2006,  i.e.  after  the  end  of  the  review  IP,  by  the  "Advance 
Authorisation  Scheme";  however,  this  appears  to  be  essentially  a  name  change.  The 
subsequent analysis focuses on the ALS in place during the review IP. 

(b)  Eligibility 

(17)  The  ALS  consists  of  six  sub-schemes.  Those  sub-schemes  differ,  inter  alia,  in  the 
criteria  for  eligibility.  Manufacturer-exporters  and  merchant-exporters  “tied  to” 
supporting  manufacturers  are  eligible  for  the  ALS  for  physical  exports  and  for  the 
ALS for annual requirement.. Main contractors which supply to the “deemed export” 
categories  mentioned  in  paragraph  8.2  of  the  FTP  2004-09,  such  as  suppliers  of  an 
export  oriented  unit  (‘EOU’),  are  eligible  for  ALS  deemed  export.  Manufacturer–
exporters  supplying  the  ultimate  exporter  are  eligible  for  ALS  for  intermediate 
supplies.  Finally,  intermediate  suppliers  to  manufacturer-exporters  are  eligible  for 
“deemed export” benefits under the sub-schemes Advance Release Order ('ARO') and 
Back-to-back Inland Letter of Credit. Since only the first four of the six sub-schemes 
were used by Jindal during the review IP, only those will be described in more detail 
below. 

(c)  Practical implementation 

(18)  An Advance Licence can be issued for: 

(i)  Physical exports: This is the main sub-scheme. It allows the duty free import of 
input  materials  for  the  production  of  a  specific  resultant  export  product. 
“Physical”  in  this  context  means  that  the  export  product  has  to  leave  Indian 
territory. An import allowance and an export obligation, including the type of 
export product, are specified in the licence. 

(ii)  Annual requirement: Such a licence is not linked to a specific export product, 
but to a wider product group (e.g. chemical and related products). The licence 
holder can – up to a certain value threshold set by its past export performance - 
import duty free any input to be used in manufacturing any of the items falling 
under  such  a  product  group.  It  can  choose  to  export  any  resultant  product 
falling under the product group using such duty-exempt material.  

(iii)  Deemed  exports:  This  sub-scheme  allows  a  main  contractor  the  duty  free 
import  of  inputs  required  in  manufacturing  goods  to  be  sold  as  “deemed 
exports”  to  the  categories  of  customers  mentioned  in  paragraph  8.2.(b)  to  (f), 
(g), (i) and (j) of the FTP 2004-09. According to the GOI, deemed exports refer 
to those transactions in which the goods supplied do not leave the country. A 
number  of  categories  of  supply  is  regarded  as  deemed  exports  provided  the 

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goods  are  manufactured  in  India,  e.g.  supply  of  goods  to  an  EOU  or  to  a 
company situated in a special economic zone (‘SEZ’).  

(iv) 

Intermediate supplies: This sub-scheme covers cases where two manufacturers 
intend  to  produce  a  single  export  product  and  divide  the  production  process. 
The  manufacturer-exporter  produces  the  intermediate  product.  It  can  import 
duty  free  input  materials  and  can  obtain  for  this  purpose  an  ALS  for 
intermediate  supplies.  The  ultimate  exporter  finalizes  the  production  and  is 
obliged to export the finished product. 

(19)  As  stated  above,  Jindal  used  the  ALS  during  the  review  IP.  More  precisely,  it  made 

use of the four sub-schemes indicated under (i) to (iv) above.  

(20)  For verification purposes by the Indian authorities, a licence holder is legally obliged 
to maintain “a true and proper account of licence-wise consumption and utilisation of 
imported  goods”  in  a  specified  format  (chapter  4.30  HOP  I  2004-09)  (hereafter  the 
“consumption  register”).  The  verification  showed  that  the  company  did  not  properly 
maintain  such  consumption  register,  i.e.  it  did  not  record  the  link  between  input 
material  and  the  final  destination  of  the  resultant  product,  as  required  by  the  format 
required by the GOI, despite the fact that it does not only export but sells the resultant 
product on the domestic market as well.  

(21)  With  regard  to  sub-scheme  (i)  and  (iii)  above,  both  the  import  allowance  and  the 
export obligation (including deemed export) are fixed in volume and value by the GOI 
and are documented on the licence. In addition, at the time of import and of export, the 
corresponding  transactions  are  to  be  documented  by  Government  officials  on  the 
licence. The volume of imports allowed under this scheme is determined by the GOI 
on the basis of standard input-output norms (‘SIONs’). SIONs exist for most products 
including the product concerned and are published in Volume II of the Handbook of 
Procedures 2004-09. The SIONs for PET film and PET chips, an intermediate product, 
have been revised downwards in October 2005. 

(22)  With  regard  to  sub-scheme  (iii)  it  is  noted  that  the  deemed  exports  to  fulfil  the 
respective obligation under the ALS were essentially intra-company sales, i.e. a PET 
chip manufacturing unit of Jindal (which is not a separate legal entity) sold the PET 
chips for further downstream production of PET film to Jindal's EOU. The import of 
raw materials took place in the context of the manufacture of the intermediate product 
(PET chips). In other words, under sub-scheme (iii) domestic sales are considered to 
be exports. 

(23)  With  regard  to  sub-scheme  (iv)  input  materials  domestically  procured  by  Jindal  are 
written  off  from  Jindal's  Advance  Licence  and  an  intermediate  Advance  Licence  is 
issued to the domestic supplier. The holder of such intermediate Advance Licence can 
import, duty-free, the goods needed to produce the product that will subsequently be 
supplied to Jindal as raw material for the production of the product concerned. 

(24) 

In  case  of  sub-scheme  (ii)  listed  above  (Advance  Licence  for  annual  requirement), 
only the import allowance in value is documented on the licence. The licence holder is 
obliged  to  “maintain  the  nexus  between  imported  inputs  and  the  resultant  product” 
(paragraph 4.24A(c) HOP I 2004-09). 

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(25) 

Imported  input  materials  are  not  transferable  and  have  to  be  used  to  produce  the 
resultant  export  product.  The  export  obligation  must  be  fulfilled  within  a  prescribed 
time frame after issuance of the licence (18 months with two possible extensions of 6 
months each, i.e. a total of 30 months). 

(26)  The  verification  showed  that  the  company  specific  consumption  rate  of  key  raw 
materials needed to produce one kilogram of PET film, in various degrees depending 
on the quality of the PET-film and as reported in the consumption register, was lower 
than the corresponding SION. This was clearly the case with regard to the old SION 
for PET film and PET chips, and, to a lesser extent, to the revised SION which came 
into  force  in  September  2005,  i.e.  during  the  review  IP.  In  other  words,  Jindal  was 
allowed to import duty-free, as per the SION, more raw materials than actually needed 
for its manufacturing process. This made the actual consumption register, in line with 
the  Indian  FTP,  the  crucial  verification  element.  However,  this  register  was  neither 
properly kept nor ever inspected by the GOI so far. The company claimed that the GOI 
would  adjust  the  excess  benefit  when  the  licences  expired,  i.e.  30  months  from  the 
issuance  of  a  licence,  as  the  common  practice  is  to  make  use  of  the  two  possible 
extensions  of  6  months  each.  However,  this  allegation  could  not  be  verified  as  no 
licence used by Jindal has been redeemed yet. 

(27)  Changes in the administration of the FTP, which became effective in autumn of 2005 
(mandatory sending of the consumption register to the Indian authorities in the context 
of the redemption procedure) have not yet been applied in the case of Jindal. Thus, the 
de facto implementation of this provision could not be verified, at this stage. 

(e)  Conclusion 

(28)  The  exemption  from  import  duties  is  a  subsidy  within  the  meaning  of  Article 
2(1)(a)(ii) and Article 2(2) of the basic Regulation, in that the non-collection of import 
duties otherwise due is a financial contribution of the GOI, which conferred a benefit 
upon Jindal by improving its liquidity.  

(29) 

In addition, the four sub-schemes used by Jindal (i.e. the ones listed above under (i) to 
(iv))  are  contingent  in  law  upon  export  performance,  and  therefore  deemed  to  be 
specific and countervailable under Article 3(4)(a) of the basic Regulation. Without an 
export  commitment  a  company  cannot  obtain  benefits  under  these  schemes. 
Obviously, this is the case with regard to schemes (i), (ii) and (iv), but even the ALS 
deemed exports fulfils this criterion in the present case, because the supply to an EOU 
ultimately aims at real exports.  

(30)  The  sub-schemes  used  in  the  present  case  cannot  be  considered  as  permissible  duty 
drawback  systems  or  substitution  drawback  systems  within  the  meaning  of  Article 
2(1)(a)(ii) of the basic Regulation. They do 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. The GOI did 
not  effectively  apply  its  verification  system  or  procedure  to  confirm  whether  and  in 
what amounts inputs were consumed in the production of the exported product (Annex 
II(II)(4)  of  the  basic  Regulation  and,  in  the  case  of  substitution  drawback  schemes, 
Annex III(II)(2) of the basic Regulation). The SIONs for the product concerned were 
not  sufficiently  precise.  The  SIONs  themselves  cannot  be  considered  a  verification 
system  of  actual  consumption,  because  the  design  of  those  overly  generous  standard 

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norms  does  not  enable  the  GOI  to  verify  with  sufficient  precision  what  amount  of 
inputs were consumed in the export production. Furthermore, no effective control by 
the GOI based on the consumption register took place.  

(31)  The  company,  in  its  post-disclosure  comments,  maintained  that  it  keeps  a  proper 
consumption  register  and,  as  such,  that  a  proper  verification  system  is  in  place  in 
accordance  with  Annex  II  of  the  basic  Regulation.  It  further  claimed  that  the  ALS 
works  as  a  substitution  scheme,  so  that  duty-free  inputs  may  be  used  to  produce 
products  sold  domestically,  as  long  as  the  duty-free  inputs  are,  either  directly  or 
through  substitution,  consumed  in  the  production  of  goods  subsequently  exported 
within a reasonable period of time. However, even though the company might keep a 
register,  of  the  consumption  of  raw  material  to  produce  a  quantity  of  the  product 
concerned,  it  failed  to  maintain  a  system  whereby  it  could  be  verified  which  inputs 
were  consumed  in  the  production  of  the  exported  product  and  in  what  amounts,  as 
stipulated by the Indian FTP (Appendix 23) and in accordance with Annex II(II)(4) of 
the basic Regulation. Further, it does not maintain a system whereby it can be verified 
that  the  quantity  of  the  input  for  which  drawback  is  claimed  does  not  exceed  the 
quantity  of  similar  product  exported,  in  accordance  with  Annex  III(II)(2).  In  the 
present case, it is, after careful consideration, maintained that there is no link between 
the  duty-free  input  consumed  and  the  exported  product,  therefore,  there  is  no  proper 
verification system in place. 

(32)  The sub-schemes are therefore countervailable.  

(f)  Calculation of the subsidy amount 

(33)  The subsidy amount was calculated as follows. The numerator is the sum of the import 
duties  foregone  (basic  customs  duty  and  special  additional  customs  duty)  on  the 
material  imported  under  sub-schemes  (i)  to  (iii)  respectively  eligible  for  imports  via 
the  intermediate  manufacturer;  in  the  case  of  sub-scheme  (iv),  the  numerator  is  the 
sum of the import duties foregone on inputs used in producing the product concerned 
during the review IP.  

(34)  The company claimed, in its post-disclosure comments, that the customs duties for the 
raw  materials  needed  for  the  production  of  PET  film  have  decreased  from  15%  to 
7,5%  from  March  2006,  i.e.,  after  the  end  of  the  IP,  and  requested  that  the 
Commission  takes  this  change  into  account  in  the  calculation  of  the  subsidy  rate  for 
ALS. However, although there have been instances were events occurring after the IP 
have  been  taken  into  account,  this  is  restricted  to  extraordinary  circumstances  which 
does not appear to be now the case. Therefore, in accordance with Articles 5 and 11(1) 
of the basic Regulation, this claim has to be rejected. 

(35)  The company further claimed, in its post-disclosure comments, that the benefit under 
sub-scheme (iv) was, in fact, the price difference between regular domestic purchases 
of  inputs  and  purchases  of  inputs  against  invalidation  of  ALS  and  produced  some 
calculations  to  that  effect,  without  supporting  evidence.  However,  the  benefit  is 
calculated  on  the  basis  of  the  duty  foregone  in  the  licence,  since  the  sale/purchase 
price of the material is a purely commercial decision and does not alter the amount of 
duty unpaid. In any event, this claim was made post-disclosure for the first time and, 
as there was no opportunity for the Commission to verify it, it was rejected.  

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(36) 

In accordance with Article 7(1)(a) of the basic Regulation, fees necessarily incurred to 
obtain  the  subsidy  were  deducted  from  the  subsidy  amounts  where  justified  claims 
were made. The entire amount of import duties foregone is taken as the numerator and 
not the excess remission/exemption, as the company claims, because the ALS does not 
fulfil the conditions laid down in Annex II of the basic Regulation. In accordance with 
Article 7(2) of the basic Regulation, the denominator is the export turnover during the 
review IP. The company claimed that deemed exports should be included in the total 
export turnover of the company during the review IP. However, as these transactions 
are not, in fact, exports and are sales to the domestic market, they cannot be properly 
classified as exports and were thus not included in the total export turnover amount. 

(37)  The subsidy rate established for the ALS amounts to 14,68 %. 

2. 

Duty Entitlement Passbook Scheme (‘DEPBS’) 

(a)  Legal Basis 

(38)  A description of the DEPBS is contained in paragraph 4.3 of the FTP 2004-09. 

(b)  Eligibility 

(39) 

Jindal was not found to be using the DEPBS during the review IP, therefore no further 
analysis of the countervailability of this scheme is necessary. 

3. 

Export Oriented Units Scheme (‘EOUS’)/Special Economic Zones Scheme ('SEZS') 

(a)  Legal basis 

(40)  The details of these schemes are contained in chapter 6 of the FTP 2004-09, the HOP I 
2004-09 (EOUS), the SEZ Act 2005 and the rules framed thereunder (SEZS).  

(b)  Eligibility 

(41)  With  the  exception  of  pure  trading  companies,  all  enterprises  which  undertake  to 
export a certain amount of their production of goods or services may be set up under 
the  EOUS  or  SEZS.  Jindal  was  found  to  benefit  from  the  EOUS,  but  not  the  SEZS 
during the review IP. Consequently, the analysis focuses on the EOUS only. 

(c)  Practical implementation 

(42)  An EOU can be established anywhere in India. This scheme is complementary to the 

SEZS.  

(43)  An application for EOU status must include details of, inter alia, planned production 
quantities,  projected  value  of  exports, 
indigenous 
requirements  for  a  period  of  five  years.  If  the  authorities  accept  the  company’s 
application, the terms and conditions attached to the acceptance will be communicated 
to  the  company.  The  agreement  to  be  recognised  as  a  company  under  the  EOUS  is 
valid for a five-year period and can be renewed further. 

import  requirements  and 

EN 

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   EN 

 
(44)  A  crucial  obligation  of  an  EOU,  as  set  out  in  the  FTP  2004-09,  is  to  achieve  net 
foreign exchange (‘NFE’) earnings, i.e. in a reference period (5 years), the total value 
of exports has to be higher than the total value of imported goods. 

(45)  An EOU is entitled to the following concessions: 

(i) 

exemption  from  import  duties  on  all  types  of  goods  (including  capital  goods, 
raw  materials  and  consumables)  required  for  the  manufacture,  production, 
processing, or in connection therewith; 

(ii) 

exemption from excise duty on goods procured from indigenous sources; 

(iii)  reimbursement of central sales tax paid on goods procured locally; 

(iv) 

facility to sell up to 50% of the fob value of exports on the domestic market so 
called domestic tariff area ('DTA')- on payment of concessional duties; 

(v) 

exemption from income tax normally due on profits realised on export sales in 
accordance with Section 10B of the Income Tax Act, for a period of 10 years 
after the beginning of its operations, but only up to 2010; 

(vi)  possibility of 100% foreign equity ownership. 

(46)  Units  operating  under  these  schemes  are  bonded  under  the  surveillance  of  customs 
officials in accordance with Section 65 of the Customs Act. EOUs are legally obliged 
to maintain, in a specified format, a proper account of all imports, of the consumption 
and utilisation of all imported materials and of the exports made. These documents are 
required  to  be  submitted  periodically  to  the  competent  authorities  (“quarterly  and 
annual progress reports”). However, “at no point in time shall [an EOU] be required to 
co-relate  every  import  consignment  with  its  exports,  transfers  to  other  units,  sales  in 
the DTA and balance in stock”, as per paragraph 6.11.2 of the FTP 2004-09.  

(47)  Domestic sales are dispatched and recorded on a self-certification basis. The dispatch 
process of export consignments of an EOU is supervised by a customs/excise official, 
who is permanently posted in the EOU. 

(48) 

Jindal utilized the EOU to import capital goods free of import duties and to obtain a 
reimbursement of the central sales tax paid on goods procured locally. It did not make 
use  of  the  exemption  from  import  duties  on  raw  materials,  as  the  EOU  facility,  in 
order  to  produce  PET  film,  uses  PET  chips  as  raw  materials.  These  PET  chips  are 
produced  in  another  unit  of  this  company  from  raw  materials  purchased  under  the 
ALS.  

(d)  Conclusions on the EOU 

(49)  The exemption of an EOU from two types of import duties (“basic customs duty” and 
“special additional customs duty”) and the reimbursement of the central sales tax are 
financial  contributions  by  the  GOI  within  the  meaning  of  Article  2(1)(a)(ii)  of  the 
basic  Regulation.  Government  revenue  which  would  be  due  in  the  absence  of  this 
scheme  is  foregone,  thus  conferring  a  benefit  upon  the  EOU  within  the  meaning  of 
Article 2(2) of the basic Regulation, by improving its liquidity.  

EN 

13 

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(50)  Thus, the exemption from basic customs duty and special additional customs duty and 
the  sales  tax  reimbursement  constitute  subsidies  in  the  meaning  of  Article  2  of  the 
basic Regulation. They are contingent in law upon export performance and, therefore, 
deemed  to  be  specific  and  countervailable  under  Article  3(4)(a)  of  the  basic 
Regulation.  The  export  objective  of  an  EOU  as  set  out  in  paragraph  6.1  of  the  FTP 
2004-2009 is a necessary condition to obtain the incentives.  

(51) 

In  addition,  it  was  confirmed  that  the  GOI  has  no  effective  verification  system  or 
procedure in place to confirm whether and in what amounts duty and/or sales tax-free 
procured  inputs  were  consumed  in  the  production  of  the  exported  product  (Annex 
II(II)(4)  of  the  basic  Regulation  and,  in  the  case  of  substitution  drawback  schemes, 
Annex III(II)(2) of the basic Regulation). In any event, the exemption from duties on 
capital goods is already not a permissible duty drawback scheme, because such capital 
goods are not consumed in the production process. 

(52)  The  GOI  did  not  carry  out  a  further  examination  based  on  actual  inputs  involved, 
although  this  would  normally  need  to  be  done  in  the  absence  of  an  effective 
verification system (Annex II(II)(5) and Annex III(II)(3) of the basic Regulation), nor 
did it prove that no excess remission took place.  

(e)  Calculation of the subsidy amount 

(53)  Accordingly,  the  countervailable  benefit  is  the  exemption  from  total  duties  (basic 
customs duty and special additional customs duty) normally due upon importation, as 
well as the sales tax reimbursement, both during the review IP. 

(i)  Reimbursement of central sales tax on domestically procured goods 

(54)  The numerator was established as follows: the subsidy amount was calculated on the 
basis  of  the  sales  tax  reimbursable  on  the  purchases  made  for  the  production  sector, 
e.g.,  parts  and  packing  materials,  during  the  review  IP.  Fees  necessarily  incurred  to 
obtain  the  subsidy  were  deducted  in  accordance  with  Article  7(1)(a)  of  the  basic 
Regulation.  

(55) 

In accordance with Article 7(2) of the basic Regulation, this subsidy amount has been 
allocated  over  the  export  turnover  generated  by  all  export  sales  of  the  product 
concerned during the review IP (the denominator), because the subsidy is contingent 
upon  export  performance  and  it  was  not  granted  by  reference  to  the  quantities 
manufactured,  produced,  exported  or  transported.  The  subsidy  margin  thus  obtained 
was 0,04 %. 

(ii)  Exemption from import duties (basic customs duty and special additional 
customs duty) and reimbursement of central sales tax on capital goods 

(56) 

In accordance with Article 7(3) of the basic Regulation, the benefit has been calculated 
on the basis of the amount of unpaid customs duty on imported capital goods and of 
the amount of sales tax reimbursed on purchases of capital goods, both spread across a 
period  which  reflects  the  normal  depreciation  period  of  such  capital  goods  in  the 
industry  of  the  product  concerned.  The  company  claimed  that  this  should  be  the 
depreciation  rate  actually  used  by  the  company  in  its  financial  statements;  however, 
the requirement in Article 7(3) is interpreted to refer to the depreciation rate specified 

EN 

14 

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in  the  legislation  applicable  to  the  company,  in  this  case  the  rate  specified  in  the 
Companies  Act  1956.  The  amount  so  calculated  which  is  then  attributable  to  the 
review IP has been adjusted by adding interest during this period in order to reflect the 
value of the benefit over time and thereby establishing the full benefit of this scheme 
to  the  recipient.  Fees  necessarily  incurred  to  obtain  the  subsidy  were  deducted  in 
accordance with Article 7(1)(a) of the basic Regulation from this sum to arrive at the 
subsidy  amount  as  numerator.  In  accordance  with  Article  7(2)  and  7(3)  of  the  basic 
Regulation this subsidy amount has been allocated over the export turnover of sales of 
the  product  concerned  during  the  review  IP  as  appropriate  denominator,  because  the 
subsidy is contingent upon export performance and it was not granted by reference to 
the quantities manufactured, produced, exported or transported. The company claimed 
that deemed exports should be included in the total export turnover, but this claim was 
rejected for the reasons set out in recital (36) above. The subsidy margin thus obtained 
was 1,26 %. 

(57)  Thus, the total subsidy margin under the EOU scheme for Jindal amounts to 1,3 %. 

4. 

Export Promotion Capital Goods Scheme (‘EPCGS’) 

(a)  Legal Basis 

(58)  A detailed description of the EPCGS can be found in Chapter 5 of the FTP 2004-09 

and in Chapter 5 of the HOP I 2004-09. 

(b)  Eligibility 

(59)  Any manufacturer-exporter and merchant-exporter “tied to” a supporting manufacturer 
or  service  provider  is  eligible  for  this  scheme.  Jindal  was  found  to  benefit  from  this 
scheme during the review IP. 

(c)  Practical Implementation 

(60)  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. 

(d)  Conclusion on the EPCGS 

(61)  The  EPCGS  provides  subsidies  within  the  meaning  of  Article  2(1)(a)(ii)  and  Article 
2(2) of the basic Regulation, as the GOI foregoes revenue otherwise due. In addition, 
the  duty  reduction  confers  a  benefit  upon  the  exporter  because  the  non-payment  of 
duties saved upon importation improves its liquidity. 

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

EN 

15 

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(63)  The scheme cannot be considered a permissible duty drawback system or substitution 
drawback  system  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  (i)  of  the  basic  Regulation,  because  they  are  not  consumed  in  the 
production of the exported products. 

(e)  Calculation of the subsidy amount 

(64)  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, which was deemed 
to be the rate specified in the Companies Act 1956 and not the one actually used by 
the company, for the reasons set out in recital (56) above. 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. 

(65)  The company claimed that capital goods imported duty-free under the ECPG scheme 
for use in the Khanvel unit are no longer in use and that the benefit relating to such 
goods should not be included in the numerator. However, as there is no evidence that 
the  company  no  longer  possesses  such  goods  or  that  it  will  not  use  them  again,  the 
Commission must reject this claim. 

(66) 

In accordance with Article 7(2) and 7(3) of the basic Regulation, this subsidy amount 
has been allocated over the export turnover of the product concerned generated during 
the  review  IP  (the  denominator),  as  the  subsidy  is  contingent  upon  export 
performance.  The  company  claimed  that  deemed  exports  should  be  included  in  the 
total export turnover, but this claim was rejected for the reasons set out in recital (36) 
above. The subsidy obtained by Jindal is 1,11 %. 

5. 

Export Income Tax Exemption Scheme (‘EITES’) 

(a)  Legal basis 

(67)  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.  Export 
Oriented  Units  e.g.  may  claim  income  tax  exemptions  under  section  10B  of  the 
Income Tax Act 1961. 

(b)  Practical implementation 

(68)  As Jindal was not found to have  availed of any benefits under  the EITES  no  further 

analysis of the countervailability of this scheme is necessary. 

6. 

Export Credit Scheme (‘ECS’) 

(a)  Legal basis 

(69)  The details of the scheme are set out in Master Circular IECD No. 5/04.02.01/2002-03 
(Export Credit in Foreign Currency) and Master Circular IECD No. 10/04.02.01/2003-

EN 

16 

   EN 

 
04 (Rupee Export Credit) of the Reserve Bank of India (‘RBI’), which is addressed to 
all commercial banks in India. 

(b)  Eligibility 

(70)  Manufacturing  exporters  and  merchant  exporters  are  eligible  for  this  scheme.  Jindal 

was found to benefit from this scheme during the review IP. 

(c)  Practical implementation 

(71)  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  available  to  exporters  at 
internationally  competitive  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. 

(72)  As  a  result  of  these  RBI  Master  Circulars,  exporters  can  obtain  export  credit  at 
preferential interest rates compared to the interest rates on ordinary commercial credit 
(cash credits), which are set under market conditions. 

(d)  Conclusion on the ECS 

(73)  Firstly, by lowering financing costs as compared with market interest rates, the above 
preferential  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  Regulation  and  it  instructs  commercial  banks  to  grant 
preferential 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. 

(e)  Calculation of the subsidy amount 

(74)  The  subsidy  amount  has  been  calculated  on  the  basis  of  the  difference  between  the 
interest paid for export credits used during the review IP and the amount that would 
have  been  payable  if  market  interest  rates  were  charged,  as  for  ordinary  commercial 
loans made by the company. The subsidy amount (numerator) has been allocated over 
the  total  export  turnover  during  the  review  investigation  period  (denominator)  in 
accordance with Article 7(2) of the basic Regulation, as the subsidy is contingent upon 
export  performance  and  is  not  granted  by  reference  to  quantities  manufactured, 
produced,  exported  or  transported.  Jindal  availed  of  benefits  under  the  ECS  and 
obtained a subsidy of 0,1 %. 

EN 

17 

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7. 

Duty-Free Replenishment Certificate (‘DFRC’) 

(a)  Legal basis 

(75)  The legal basis for this scheme is contained in paragraph 4.2 of the FTP 2004-09. 

(b)  Practical Implementation 

(76)  As Jindal was not  found to have  availed of any benefits under the  DFRC during the 

review IP, no further analysis of the countervailability of this scheme is necessary. 

III.  Regional Scheme 

Package Scheme of Incentives (‘PSI’) of the Government of Maharashtra (‘GOM’) 

(a)  Legal basis 

(77) 

In  order  to  encourage  the  establishment  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 the State, 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  eligible  for  application  from  1  October 
1993 to 31 March 2001, whereas the latest amendment, the PSI 2006, was introduced 
in  the  margins  of  the  "Industrial,  Investment  &  Infrastructure  Policy  of  Maharashtra 
2006" in spring 2006 and is foreseen to be eligible up to 31 March 2011. The PSI of 
the GOM is composed of several sub-schemes, the main being direct grants via a so-
called industrial promotion subsidy, the exemption from local sales tax and electricity 
duty and the refund of octroi tax.  

(78) 

Jindal continues to avail incentives under the PSI 1993 until May 2011 and not under 
successor  schemes.  Consequently,  only  the  PSI  1993  was  assessed  in  the  context  of 
the case at hand. 

(b)  Eligibility 

(79) 

In order to be eligible, companies must invest in less developed areas, either by setting 
up  a  new  industrial  establishment  or  by  making  a  large  scale  capital  investment  in 
expansion  or  diversification  of  an  existing  industrial  establishment.  These  areas  are 
classified,  according  to  their  economic  development,  into  different  categories  (e.g., 
less  developed  area,  lesser  developed  area  and  least  developed  area).  The  main 
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. 

(c)  Practical implementation 

(80)  Remission of local sales tax on sale of finished goods: Goods are normally subject to 
central  sales  tax  (for  inter-State  sales)  or,  in  the  past,  State  sales  tax  (for  intra-State 
sales)  at  varying  levels,  depending  upon  the  State(s)  in  which  transactions  are  being 
made.  Since  April  2005  the  sales  tax  legislation  for  intra-State  sales  in  Maharashtra 
was  replaced  by  a  value  added  tax  ('VAT')  system.  Under  the  exemption  scheme, 
designated  units  are  not  required  to  collect  any  sales  tax  on  their  sales  transactions. 

EN 

18 

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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. Jindal was found to 
have benefited from this exemption in relation to sales transactions during the review 
IP. 

(81)  Reimbursement of electricity duty: Eligible units are eligible for refund of electricity 
duty on the electricity consumed for production purposes for a period of seven years 
from the date of commercial production. In the case of Jindal this seven years period 
lapsed  on  31  March  2003.  Consequently,  Jindal  was  no  longer  eligible  for  the 
reimbursement of electricity duty. 

(82)  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.  Industrial 
enterprises are entitled to a refund of the octroi tax from the GOM, if their facility is 
located  in  certain  specified  towns  within  the  territory  of  the  State.  The  total  amount 
that  may  be  refunded  is  restricted  to  100  %  of  the  fixed  capital  investment.  Jindal's 
plant is located outside city limits; hence it is per se exempt from octroi tax so that this 
sub-scheme is not applicable in the present case.  

(d)  Conclusion on the PSI 1993 of the GOM 

(83) 

Jindal only accrued remission rights of sales tax on sales of finished goods during the 
review  IP,  which  in  the  past  has  been  found  not  to  confer  a  benefit  to  the  recipient 
(recital  (114)  of  Regulation  (EC)  No  367/2006.  Consequently,  the  PSI  is  not 
countervailable in the present case. 

IV.  Amount of Countervailable Subsidies 

(84)  The  amount  of  countervailable  subsidies  determined  in  accordance  with  the  basic 
Regulation,  expressed  ad  valorem,  for  the  investigated  exporting  producer  is  19,5%. 
This  amount  of  subsidisation  exceeds  the  de  minimis  threshold  mentioned  under 
Article 14(5) of the basic Regulation. 

SCHEME 

ALS 

EOUS 

EPCGS 

ECS 

TOTAL 

% 

% 

% 

Jindal 

14,68 

1,30 

1,11 

% 

0,1 

% 

17,1 

V. 

Lasting nature of changed circumstances with regard to subsidisation 

(85) 

(86) 

In accordance with Article 19(2) of the basic Regulation, it was examined whether the 
continuation of the existing measure was insufficient to counteract the countervailable 
subsidy which is causing injury.  

It  was  established  that,  during  the  review  IP,  Jindal  continued  to  benefit  from 
countervailable subsidisation by the Indian authorities. Further, the subsidy rate found 
during  this  review  is  considerably  higher  than  that  established  during  the  original 

EN 

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investigation. No evidence is available that the schemes will be discontinued or phased 
out in the near future.  

(87)  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 

(88) 

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

(89)  The  amended  countervailing  duty  was  established  at  the  new  rate  of  subsidisation 
found  during  the  present  review,  as  the  injury  margin  calculated  in  the  original 
investigation remains higher. 

(90)  Pursuant to Article 24(1) of the basic Regulation and Article 14(1) of Regulation (EC) 
No 384/96, no product shall be subject to both anti-dumping and countervailing duties 
for  the  purpose  of  dealing  with  one  and  the  same  situation  arising  from  dumping  or 
from export subsidisation. However, Jindal is subject to an anti-dumping duty of 0 % 
with  regard  to  the  product  concerned,  therefore  these  provisions  do  not  apply  in  the 
present case. 

(91) 

Jindal, the GOI and the Community industry 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.  The  GOI  did  not  submit 
any comments, whereas Jindal's comments have been discussed in the recitals relevant 
to each specific comment above. 

(92)  The  company,  in  its  post-disclosure  comments,  has  requested  the  Commission  to 
accept a price undertaking in order to offset the countervailable subsidies found herein. 
The  Commission  has  examined  the  company's  proposal  and  considers  that  a  price 
undertaking  cannot  be  accepted.  Price  undertakings  based  on  groups  of  products,  as 
suggested by the company, permit a large degree of flexibility to change the technical 
characteristics  of  the  products  within  the  group.  PET  film  comprises  numerous  and 
evolving  differentiating  features,  which  largely  determine  sales  price.  Consequently, 
changes in those features have a significant impact on prices. An attempt to subdivide 
the  groupings  to  make  them  more  homogeneous  in  terms  of  physical  characteristics 
would  lead  to  a  multiplication  of  groupings  which  would  render  monitoring 
unworkable, in particular, by making it difficult for customs authorities to discern the 
difference between product types and the classification of products by grouping upon 
importation.  For  these  reasons,  the  acceptance  of  the  undertaking  is  considered 
impractical  within  the  meaning  of  Article  13(3)  of  the  basic  Regulation.  Jindal  was 
informed  and  given  the  opportunity  to  comment.  However,  its  comments  have  not 
altered the above conclusion. 

EN 

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(93)  As  India  Polyfilms  Limited,  a  company  previously  related  to  Jindal,  merged  with 
Jindal on 1st April 1999 and no longer forms a separate entity, it was removed from the 
list set out in Article 1(2), 

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 duty applicable to the net free-at-Community-frontier price, before duty for 

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

Company 

Definitive duty (%)  TARIC Additional Code 

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

12,0 

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

12,5 

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

14,9 

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

17,1 

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

8,7 

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

19,1 

A026 

A027 

A028 

A030 

A031 

A032 

All other companies 

19,1 

A999’ 

Article 2 

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

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

EN 

21 

   EN 

 
 
Done at Brussels,  

For the Council 
The President 
[…] 

EN 

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