L_2005266EN.01000101.xml
| 11.10.2005 | EN | Official Journal of the European Union | L 266/1 |
COUNCIL REGULATION (EC) No 1645/2005
of 6 October 2005
amending Regulation (EC) No 2603/2000 imposing a definitive countervailing duty on imports of certain polyethylene terephthalate originating, inter alia, 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 Community (1) (the basic Regulation), and in particular Article 20 thereof,
Having regard to the proposal submitted by the Commission after consulting the Advisory Committee,
Whereas:
A. PREVIOUS PROCEDURE
| (1) | The Council, by Regulation (EC) No 2603/2000 (2), imposed a definitive countervailing duty on imports of certain polyethylene terephthalate (PET) with a coefficient of viscosity of 78 ml/g or higher, according to DIN (Deutsche Industrienorm) 53728, normally declared within CN code 3907 60 20 and originating, inter alia, in India (the product concerned). The measures took the form of a specific duty ranging between EUR 0 and 41,3 per tonne for cooperating individual Indian exporters, with a specific duty of EUR 41,3 per tonne for all other Indian exporters. |
B. CURRENT PROCEDURE
1. REQUEST FOR REVIEW
| (2) | Following the imposition of definitive measures, the Commission received a request for the initiation of an accelerated review of Regulation (EC) No 2603/2000 pursuant to Article 20 of the basic Regulation from an Indian producer of the product concerned, South Asian Petrochem Limited (the applicant). The applicant claimed not to be related to any other exporter of the product concerned. Furthermore, it asserted that it had not exported the product concerned during the original investigation period (1 October 1998 to 30 September 1999), but had exported the product concerned to the Community subsequently. |
2. INITIATION OF AN ACCELERATED REVIEW
| (3) | The Commission examined the evidence submitted by the applicant and considered it sufficient to justify the initiation of a review in accordance with the provisions of Article 20 of the basic Regulation. After consultation of the Advisory Committee and after the Community industry concerned had been given the opportunity to comment, the Commission initiated by a notice in the Official Journal of the European Union (3) an accelerated review of Regulation (EC) No 2603/2000 with regard to the applicant. |
3. PRODUCT CONCERNED
4. INVESTIGATION PERIOD
| (5) | The investigation of subsidisation covered the period from 1 October 2003 to 30 September 2004 (the review investigation period). |
5. PARTIES CONCERNED
| (6) | The Commission officially advised the applicant and the Government of India (the GOI) of the initiation of the investigation. Furthermore, it gave other interested parties the opportunity to make their views known in writing and to request a hearing. However, no such views or any request for a hearing were received by the Commission. |
| (7) | The Commission sent a questionnaire to the applicant and received a full reply within the set deadline. The Commission sought and verified all information it deemed necessary for the purpose of the investigation and carried out verification visits at the premises of the applicant in Calcutta and in Haldia. |
C. SCOPE OF THE REVIEW
| (8) | The Commission examined the same subsidy schemes which were analysed in the original investigation. It also examined whether the applicant had used any other subsidy schemes, or had received ad hoc subsidies in relation to the product concerned. |
D. RESULTS OF THE INVESTIGATION
1. NEW EXPORTER QUALIFICATION
| (9) | The applicant was able to satisfactorily demonstrate that it was not related, directly or indirectly, to any of the exporting producers subject to the countervailing measures in force with regard to the product concerned. |
| (10) | The investigation confirmed that the applicant had not exported the product concerned during the original period of investigation, i.e. from 1 October 1998 to 30 September 1999, and that it had begun exporting to the Community after this period. Furthermore, the applicant was not individually investigated during the original investigation for reasons other than a refusal to cooperate with the Commission. |
| (11) | Consequently, it is confirmed that the applicant should be considered as a new exporter. Therefore, in accordance with Article 20 of the basic Regulation, an individual countervailing duty rate should be determined for the applicant. |
2. SUBSIDISATION
| (12) | On the basis of the information contained in the applicant’s reply to the Commission’s questionnaire and further collected in the course of the investigation, the following schemes were investigated:
| — | Duty Entitlement Passbook Scheme, |
| — | Export Oriented Unit Scheme/Special Economic Zones Scheme, |
| — | Export Promotion Capital Goods Scheme, |
| — | Income Tax Exemption Scheme, |
| — | West Bengal Incentives Scheme. | |
2.1. SCHEMES ORIGINALLY INVESTIGATED AND USED BY THE COMPANY
2.1.1. Export Oriented Unit Scheme (EOUS)/Special Economic Zones Scheme (SEZS)
(a) Legal basis
| (13) | These schemes are based on the Foreign Trade (Development and Regulation) Act 1992 (No 22 of 1992) which entered into force on 7 August 1992 (Foreign Trade Act). This act authorises the GOI to issue notifications regarding trade policy, formerly called ‘Export-Import Policy’ and since 1 September 2004 named ‘Foreign Trade Policy’. The Foreign Trade Policy 2004 to 2009 (FTP), which incorporates the Export and Import Policy 2002 to 2007, is relevant to the review investigation period of this case. In addition, the GOI also sets out the procedures governing the FTP in a ‘Handbook of Procedures Volume I’ (HOP I) (4). |
| (14) | The details of these schemes are contained in chapters 6 (EOUS) and 7 (SEZS) respectively of the FTP and of the HOP I. |
(b) Eligibility
| (15) | With the exception of pure trading companies, all enterprises which, in principle, undertake to export their entire production of goods or services may be set up under the EOUS or SEZS. However, unlike services and agriculture, undertakings in the industrial sectors have to fulfil a minimum investment threshold in fixed assets (INR 10 million) to be eligible for the EOUS. |
(c) Practical implementation
| (16) | The SEZS is the successor scheme of the former Export Processing Zones Scheme (EPZS). SEZs are specifically delineated duty free enclaves and considered by the FTP as foreign territory for the purpose of trade operations, duties and taxes. Thirty five SEZs have been approved by the Indian authorities. |
| (17) | EOUs, on the other side, are geographically more flexible and can be established anywhere in India. This scheme is complementary to the SEZS. |
| (18) | An application for operation under these schemes must include details for a period of the next five years on, inter alia, planned production quantities, projected value of exports, import requirements and indigenous requirements. If the authorities accept the company’s application, the terms and conditions attached to the acceptance is communicated to the company. The agreement recognising the company as an undertaking under the EOUS or SEZS is valid for a five-year period. The agreement may be renewed for further periods. |
| (19) | A crucial obligation of an EOU or an SEZ enterprise as set out in the FTP is to achieve net foreign exchange (NFE) earnings, i.e. in a reference period (five years) the total value of exports has to be higher than the total value of imported goods. |
| (20) | EOUS/SEZS units are 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 or 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) | ‘duty drawback on all industry rates’ with regard to furnace oil procured from domestic oil companies; |
| (v) | facility to sell a part of the production on the domestic market on payment of applicable duties on the finished product as an exception to the general requirement to export the entire production; |
| (vi) | exemption from income tax normally due on profits realised on export sales in accordance with Section 10A or Section 10B of the Income Tax Act, for a 10-year period after starting their operations, but no longer than up to 2010; |
| (vii) | possibility of 100 % foreign equity ownership. | |
| (21) | Although the concessions under both schemes are largely comparable, some differences exist. For instance, only an EOU can obtain a 50 % reduction of duties payable upon domestic sales (DTA sales), whereas in an SEZ 100 % of the duties are payable on such sales. An EOU unit can sell up to 50 % of its turnover domestically at such reduced rate. |
| (22) | Units operating under these schemes are bonded under the surveillance of customs officials in accordance with Section 65 of the Indian Customs Act. |
| (23) | They are legally obliged to maintain, in a specified format, a proper account of all imports, of the consumption and utilisation of all |
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