The European commission plans to impose 7.3 per cent countervailing duty on the value of imports of CD-R's originating from India. The proposal is expected to be put up to the EU Council of Ministers for approval by the Member States before June 17, according to a filing with the BSE by Moser Baer India Ltd. This duty is being proposed to countervail subsidies, allegedly available to Indian manufacturers of CD-R's, under the duty free import of capital goods (Machinery) scheme. Indian companies organised under the Export Oriented Unit (EOU) scheme are permitted to defer payment of import duties on import of capital goods.

Moser Baer is the only exporter of CD-R's from India to the European Community (EC). Sales of CD-R's to the EC account for approximately 40 per cent of the company's revenues. The company also produces other products such as CD-R/W, DVD-R and DVD-R/W, which are not impacted by this duty.

``We are disappointed by the European Commission's stand on this issue. In our opinion, the European Commission has not adhered to provisions of the WTO and the ruling is not in line with their own guidelines. We plan to appeal this decision at the appropriate forum,'' said Mr Deepak Puri, Chairman and Managing Director, Moser Baer India Ltd.