Full opinion text
OPINION TSOUCALAS, Senior Judge. Plaintiffs and defendant intervenors, NSK Ltd. and NSK Corporation (collectively “NSK”), NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation, NTN Bower Corporation and NTN Corporation (collectively “NTN”), and Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. (collectively “Koyo”), move pursuant to USCIT R. 56.2 for judgment upon the agency record challenging various aspects of the United States Department of Commerce, International Trade Administration’s (“Commerce”) final determination, entitled Final Results of Antidumping Duty Administrative Reviews and Revocation in Part of Tapered Roller Bearings and Parts Thereof Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan (“Final Results”), 65 Fed.Reg. 11, 767 (Mar. 6, 2000). Defendant-intervenor and plaintiff, The Timken Company (“Timken”), also moves pursuant to USCIT R. 56.2 for judgment upon the agency record challenging certain determinations of Commerce’s Final Results. Specifically, NSK contends that Commerce unlawfully: (1) used affiliated cost data for purposes other than calculating cost of production and constructed value to (a) run its model-match methodology under 19 U.S.C. § 1677(16), (b) calculate the difiner adjustment under 19 U.S.C. § 1677b(a)(6), and (c) calculate NSK’s reported United States inventory carrying costs; and (2) conducted a duty absorption inquiry under 19 U.S.C. § 1675(a)(4) for outstanding 1976 and 1987 antidumping duty orders. NTN contends that Commerce unlawfully: (1) conducted a duty absorption inquiry under 19 U.S.C. § 1675(a)(4) for outstanding 1976 and 1987 antidumping duty orders; (2) used affiliated supplier’s cost of production for inputs when it was higher than the transfer price; (3) denied a price-based level of trade adjustment when matching constructed export price sales to sales of the foreign like product; (4) rejected NTN’s reported level of trade selling expenses and reallocated NTN’s United States indirect selling expenses without regard to level of trade; (5) used Commerce’s 99.5% arm’s length test to compare NTN’s home market selling prices to those of NTN’s affiliated and unaffiliated parties; (6) included certain NTN sales that were allegedly outside the ordinary course of trade in the dumping margin and constructed value profit calculations; (7) strictly relied upon the sum-of-deviations methodology for the model match analysis; and (8) added an amount to NTN’s selling expenses that was allegedly incurred in financing cash deposits for antidumping duties. Koyo contends that Commerce unlawfully: (1) conducted a duty absorption inquiry under 19 U.S.C. § 1675(a)(4) for outstanding 1976 and 1987 antidumping duty orders; (2) applied adverse facts available to Koyo’s further manufactured tapered roller bearings; and (3) used Koyo’s entered value to establish the assessment rate under 19 C.F.R. § 351.212(b) (1998). Timken contends that Commerce unlawfully: (1) applied adverse facts available to Koyo’s entered values; and (2) permitted NTN to exclude certain expenses attributable to non-scope merchandise from its reported United States selling expenses. BACKGROUND The administrative review at issue involves the period of review (“POR”) covering October 1, 1997, through September 30, 1998. Commerce published the preliminary results of the subject reviews on October 1, 1999. See Preliminary Results of Antidumping Duty Administrative Reviews and Intent to Revoke in-Part of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan, (“Preliminary Results”) 64 Fed.Reg. 53,323. Commerce published the Final Results at issue on March 6, 2000. See 65 Fed.Reg. 11,767. JURISDICTION The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a) (2000) and 28 U.S.C. § 1581(c) (2000). STANDARD OF REVIEW In reviewing a challenge to Commerce’s final determination in an anti-dumping administrative review, the Court will uphold Commerce’s determination unless it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law_” 19 U.S.C. § 1516a(b)(l)(B)(i) (1994). I. Substantial Evidence Test Substantial evidence is “more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Substantial evidence “is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.” Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citations omitted). Moreover, “[t]he court may not substitute its judgment for that of the [agency] when the choice is ‘between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo.’” American Spring Wire Corp. v. United States, 8 CIT 20, 22, 590 F.Supp. 1273, 1276 (1984) (quoting Penntech Papers, Inc. v. NLRB, 706 F.2d 18, 22-23 (1st Cir.1983) (quoting, in turn, Universal Camera, 340 U.S. at 488, 71 S.Ct. 456)). II. Chevron Two-Step Analysis To determine whether Commerce’s interpretation and application of the anti-dumping statute is “in accordance with law,” the Court must undertake the two-step analysis prescribed by Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the first step, the Court reviews Commerce’s construction of a statutory provision to determine whether “Congress has directly spoken to the precise question at issue.” Id. at 842, 104 S.Ct. 2778. “To ascertain whether Congress had an intention on the precise question at issue, [the Court] employ[s] the ‘traditional tools of statutory construction.’ ” Timex V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed.Cir.1998) (citing Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778). “The first and foremost ‘tool’ to be used is the statute’s text, giving it its plain meaning. Because a statute’s text is Congress’ final expression of its intent, if the text answers the question, that is the end of the matter.” Id. (citations omitted). Beyond the statute’s text, the tools of statutory construction “include the statute’s structure, canons of statutory construction, and legislative history.” Id. (citations omitted). But see Floral Trade Council v. United States, 23 CIT 20, 22 n. 6, 41 F.Supp.2d 319, 323 n. 6 (1999) (noting that “[n]ot all rules of statutory construction rise to the level of a canon, however”) (citation omitted). If, after employing the first prong of Chevron, the Court determines that the statute is silent or ambiguous with respect to the specific issue, the question for the Court becomes whether Commerce’s construction of the statute is permissible. See Chevron, 467 U.S. at 843, 104 S.Ct. 2778. Essentially, this is an inquiry into the reasonableness of Commerce’s interpretation. See Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1038 (Fed.Cir.1996). Provided Commerce has acted rationally, the Court may not substitute its judgment for the agency’s. See Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994) (holding that “a court must defer to an agency’s reasonable interpretation of a statute even if the court might have preferred another”); see also IPSCO, Inc. v. United States, 965 F.2d 1056, 1061 (Fed.Cir.1992). The “[C]ourt will sustain the determination if it is reasonable and supported by the record as a whole, including whatever fairly detracts from the substan-tiality of the evidence.” Negev Phosphates, Ltd. v. United States, 12 CIT 1074, 1077, 699 F.Supp. 938, 942 (1988) (citations omitted). In determining whether Commerce’s interpretation is reasonable, the Court considers the following non-exclusive list of factors: the express terms of the provisions at issue, the objectives of those provisions and the objectives of the antidumping scheme as a whole. See Mitsubishi Heavy Indus. v. United States, 22 CIT 541, 545, 15 F.Supp.2d 807, 813 (1998). DISCUSSION I. Commerce’s All Purpose Use of Affiliated Supplier Costs for Inputs Obtained from NSK’s Affiliated Supplier A. Statutory Background Normal value (“NV”) of subject merchandise is defined as “the price at which the foreign like product is [ ] sold ... for consumption in the exporting country....” 19 U.S.C. § 1677b(l)(B)(i)(1994). If Commerce determines that the foreign like product is sold at a price less than the foreign like product’s cost of production (“COP”), and that the conditions listed in 19 U.S.C. § 1677b(b)(l)(A)-(B) are present, Commerce may disregard such below-cost sales in its calculation of NY. See 19 U.S.C. § 1677b(b)(l) (1994). Commerce calculates the COP of the foreign like product by adding “the cost of materials and of fabrication or other processing ... employed in producing the foreign like product ... [with] an amount for selling, general, and administrative expenses ... [and] all other expenses incidental to placing the foreign like product in ... shipment.” 19 U.S.C. § 1677b (b)(3)(A)-(C) (1994). Section 1677b(f) articulates “special rules” for the calculation of COP and constructed value (“CV”) and permits Commerce to disregard an affiliated party transaction when “the amount representing [the transaction or transfer price] does not fairly reflect the amount usually reflected in sales of merchandise under consideration in the market under consideration,” that is, an arms-length or market price. 19 U.S.C. § 1677b(f)(2) (1994). If such “a transaction is disregarded ... and no other transactions are available for consideration,” Commerce shall value the cost of an affiliated party input “based on the information available as to what the amount would have been if the transaction had occurred between persons who are not affiliated,” that is, based on arm’s-length or market value. Id. Section 1677b(f)(3)’s “major input rule” states that Commerce may calculate the value of the major input on the basis of the data available regarding COP, if such COP exceeds the market value of the input calculated under § 1677b(f)(2). See 19 U.S.C. § 1677b(f)(3) (1994). Commerce, however, may rely on the data available only if: (1) a transaction between affiliated parties involves the production by one of such parties of a “major input” to the merchandise produced by the other and, in addition, (2) Commerce has “reasonable grounds to believe or suspect” that the amount reported as the value of such input is below the COP. See 19 U.S.C. § 1677b(f)(3). For purposes of § 1677b(f)(3), regulation 19 C.F.R. § 351.407(b) (1998) provides that Commerce will value a major input supplied by an affiliated party based on the highest of (1) the actual transfer price for the input; (2) the market value of the input; or (3) the COP of the input. See also Mannesmannrohen-Werke AG v. United States, 23 CIT 826, 837, 77 F.Supp.2d 1302, 1312 (1999) (holding that 19 U.S.C. §§ 1677b(f)(2) and (3), as well as the legislative history of the major input rule, support Commerce’s decision to use the highest of transfer price, COP, or market value to value the major inputs that the producer purchased from the affiliated supplier). Accordingly, paragraphs (2) and (3) of 19 U.S.C. § 1677b(f) authorize Commerce, in calculating COP and CV, to: (1) disregard a transaction between affiliated parties if, in the case of any element of value that is required to be considered, the amount representing that element does not fairly reflect the amount usually reflected in sales of merchandise under consideration in the market under consideration; and (2) determine the value of the major input on the basis of the information available regarding COP if Commerce has “reasonable grounds to believe or suspect” that an amount represented as the value of the input is less than its COP. See Timken Co. v. United States, 21 CIT 1313, 1327-28, 989 F.Supp. 234, 246 (1997) (holding that Commerce may disregard transfer price for inputs purchased from related suppliers pursuant to 19 U.S.C. § 1677b(e)(2) (1988), the predecessor to 19 U.S.C. § 1677b(f)(2), if the transfer price or any element of value does not reflect its normal value) (citing NSK Ltd. v. United States, 19 CIT 1319, 1323-26, 910 F.Supp. 663, 668-70 (1995), aff'd, 119 F.3d 16, 1997 WL 398765 (Fed.Cir.1997)). B. Factual Background During the POR at issue, Commerce, “pursuant to 19 U.S.C. § 1677b(f), . . . requested NSK to submit affiliated supplier cost data for inputs [NSK] obtained from [NSK’s] affiliated supplier.” Mem. U.S. Opp. Pls.’ Mots. J. Agency R. (“Def.’s Mem.”) at 72. Commerce used the affiliated supplier cost data to calculate NSK’s COP and CV, and to recalculate NSK’s model-match methodology, difmer adjustment and inventory carrying costs. See id. Explaining its methodology, Commerce stated in its Issues and Decision Memorandum, (“Issues & Decision Mem.”) compiled as an appendix to the Final Results, that: in accordance with [19 U.S.C. § 1677b(f), Commerce] recalculated NSK’s reported TRB-specific COP and CV to reflect the COP of an affiliated party input if the transfer price NSK reported for that input was less than the COP for that input. [Commerce notes that] COP and CV [are composed] of several components .... The adjustment [Commerce] made for NSK’s affiliated party inputs is actually an adjustment to its reported material costs. Because material costs are a component of the cost of manufacture (COM) and COM is a component of COP and CV, when [Commerce] adjusted NSK’s reported material costs, [Commerce] not only recalculated its COP and CV, but [Commerce] ... recalculated variable [VCOM] and total [TCOM] components of COP and CV as well. Issues & Decision Mem. at 31. Therefore, as a result, Commerce resorted to using affiliated supplier cost data for purposes other than calculating COP and CV and explained: [Commerce] does not rely on a [NSK’s] reported costs solely for the calculation of COP and CV. Rather, [Commerce] employ[s] cost information in a variety of other aspects of [Commerce’s] margin calculations. For example, when determining the commercial comparability of the foreign like product in accordance with section [1677(16) ] ..., it has been [Commerce’s] long-standing practice to rely on the product-specific VCOMs and TCOMs ... for [United States] and home[]market merchandise. Likewise, when calculating a difmer adjustment to NV in accordance with section [1677b(a)(6) ] ..., it has been [Commerce’s] consistent policy to calculate the adjustment as the difference between the product-specific VCOMs ... for the [United States] and home[ ]market merchandise compared.... Furthermore, [Commerce] ha[s] permitted [NSK] to calculate [its] reported [inventory carrying costs] on the basis of TCOM. Id. C. Contentions of the Parties NSK asserts that the plain language and legislative history of 19 U.S.C. § 1677b(f) restricts Commerce’s use of affiliated supplier cost data in that “Commerce may substitute ... affiliated supplier cost data[] for affiliated supplier price data,” that is, transfer prices between affiliates, only “for purposes of subsections (b) and (e)” of § 1677b(f). Mem. P. & A. Supp. Mot. J. Agency R. (“NSK’s Mem.”) at 6 (quoting 19 U.S.C. § 1677b(f)). In particular, NSK argues that Commerce violated the law when it used NSK’s affiliated supplier cost data to: (1) run its model-match methodology under 19 U.S.C. § 1677(16); (2) calculate the difmer adjustment under 19 U.S.C. § 1677b(a)(6); and (3) calculate NSK’s reported United States inventory carrying costs. See NSK’s Mem. at 3, 6-12; Reply Mem. NSK Supp. NSK’s Mot. J. Agency R. (“NSK’s Reply”) at 2-5. NSK also argues that, pursuant to Ad Hoc Comm. of AZ-NM-TX-FL Producers of Gray Portland Cement v. United States, 13 F.3d 398, 401 (Fed.Cir.1994), the Court must presume [that 19 U.S.C. § 1677b(f) ] means that Commerce may use data gathered pursuant to subsection [§ 1677b(f) ] for calculations involving subsections [ §§ 1677b(b) and (e)] only. ... That other sections of the statute — specifically subsections [1677(16), 1677b(a)(6), 1677a(d) ] — are silent about [whether] the use of affiliated supplier cost data does not nullify the precise language of subsection [1677b(f) ]. NSK’s Mem. at 7 (emphasis added) (citations omitted). According to NSK, a “statute is passed as a whole ... and is animated by one general purpose and intent.... [E]ach part or section should be construed in connection with every other part or section so as to produce a harmonious whole.” Id. at 7-8 (citation and parenthetical omitted). Consequently, the 19 U.S.C. § 1677b(f) restriction on the use of affiliated supplier cost data applies to all of the provisions of the antidumping law that is, especially, 19 U.S.C. § 1677(16), 1677b(a)(6) and 1677a(d). See id. at 8. In a footnote, NSK further states that by naming 19 U.S.C. § 1677b(f) “[s]pecial rules for calculation of cost of production and for calculation of constructed value,” Congress expressed its intent that affiliated supplier cost data only be used to calculate COP and CV. See id. at 7 n. 2. NSK also makes reference to Commerce’s prior methodology of restricting its use of affiliated supplier data to the calculation of CV. See id. at 9. Therefore, NSK requests that Commerce “rerun the model-match methodology, and recalculate the difmer adjustment and [United States] inventory carrying costs, without regard to affiliated supplier cost data collected pursuant to subsections” 19 U.S.C. § 1677b(f)(2) and § 1677b(f)(3). Id. at 10. Commerce alleges that 19 U.S.C. § 1677b(f) does not restrict the use of affiliated supplier cost data to calculating COP and CV since Commerce requires cost data for other purposes. See Def.’s Mem. at 69-75. Commerce argues that 19 U.S.C. §§ 1677(16), 1677b(a)(6) and 1677a(d) do not prohibit Commerce from using affiliated supplier cost data. See id. at 73. Moreover, Commerce alleges that §§ 1677(16), 1677b(a)(6) and 1677a(d) grant Commerce discretion. See id. at 69-75. In particular, Commerce points out that [section 1677(16) ] does not specify a particular methodology for determining appropriate matches. Rather, the statute implicitly delegates the selection of an appropriate methodology to [Commerce]. Likewise, section [1677b(a)(6) ] grants [Commerce] the same discretion to determine a suitable method to calculate a difmer adjustment and does not restrict our selection of an appropriate methodology to any particular approach. In addition, with respect to [Commerce’s] recalculation of NSK’s [United States inventory carrying costs], section [1677a(d)] only specifies what adjustments are to be made to determine [constructed export price] and does not provide details regarding the precise calculations for each particular adjustment. Issues & Decision Mem. at 32. [I]f [Commerce] determine^] a component of a respondent’s COP and CV to be distortive for one aspect of [Commerce’s] analysis, it would be illogical and unreasonable not to make the same determination with respect to those other aspects of [Commerce’s] margin calculations where [Commerce] relied on the identical cost data. To do so would not only produce distortive results, but would be contrary to [Commerce’s] mandate to administer the dumping law as accurately as possible. Id. at 31. Commerce further argues that the plain language of § 1677b(f) does not prohibit the use of affiliated supplier cost data for purposes other than the calculation of COP and CV. See Def.’s Mem. at 73. In sum, Commerce maintains that the use of affiliated supplier cost data is not restricted only to the calculation of COP and CV. Rather, Commerce asserts that Commerce has been afforded discretion to use cost data for other purposes. See id. at 73-75. Timken generally agrees with Commerce’s arguments and states that Congressional intent directs Commerce to use the most “accurate cost data” to determine CV and COP. See The Timken Co.’s Resp. R. 56.2 Mots. J. Agency R. of NTN, Koyo, & NSK (“Timken’s Resp.”) at 7. Accordingly, Timken maintains that it is not against such intent to use the same information to implement other statutory provisions. See id. Timken asserts that Commerce “must administer the dumping laws as accurately as possible ... [and the] use [of] inaccurate data (unadjusted to account for inaccuracies attributable to related-party transfers)” clearly counters Congressional intent. Id. (emphasis added). D. Analysis The issue presented by NSK is whether Commerce can use affiliated supplier cost data obtained pursuant to 19 U.S.C. § 1677b(f) for purposes other than the calculation of COP and CV. In particular, the Court must determine whether Commerce’s use of affiliated supplier cost data to: (1) run its model-match methodology under 19 U.S.C. § 1677(16); (2) calculate the difmer adjustment under 19 U.S.C. § 1677b(a)(6); and (3) calculate NSK’s reported United States inventory carrying costs was in accordance with law. In NTN Bearing Corp. of Am. v. United States, 26 CIT -,-, 186 F.Supp.2d 1257, 1302-04 (2002) (“NTN 2002”), this Court upheld Commerce’s use of affiliated supplier cost data for purposes other than the calculation of COP and CV. Specifically, the Court held that the “statute, read as a whole, does not show Congressional intent to restrict the use of affiliated supplier cost data solely to COP and CV calculations and in effect, tie the hands of Commerce while parties could distort dumping margins with impunity.” NTN 2002, 26 CIT at -, 186 F.Supp.2d at 1303. Since Commerce’s methodology to use NSK’s affiliated supplier cost data for purposes other than the calculation of COP and CV and the parties arguments are practically identical to those presented in NTN 2002, the Court adheres to its reasoning in its prior holding. The plain language of 19 U.S.C. § 1677b(f) neither restricts Commerce from using affiliated supplier cost data for purposes other than the calculation of COP or CV, nor does it indicate Congress’s intent that Commerce be prohibited from using such data to calculate accurate dumping margins. See id. at -, 186 F.Supp.2d at 1303. Accordingly, this Court finds that Commerce’s use of NSK’s affiliated cost data for purposes other than the calculation of COP and CV was reasonable and in accordance with law. II. Commerce’s Duty Absorption Inquiry for a Transition Order A. Background Title 19, United States Code, § 1675(a)(4) (1994) provides that during an administrative review initiated two or four years after the publication of an antidump-ing duty order, Commerce, at the request of a domestic interested party, “shall determine whether antidumping duties have been absorbed by a foreign producer or exporter subject to the order if the subject merchandise is sold in the United States through an importer who is affiliated with such foreign producer or exporter.” Section 1675(a)(4) further provides that Commerce shall notify the International Trade Commission (“ITC”) of its findings regarding such duty absorption for the ITC to consider conducting a five-year (“sunset”) review under 19 U.S.C. § 1675(c) (1994), and the ITC will take such findings into account in determining whether material injury is likely to continue or recur if an order were revoked under § 1675(c). See 19 U.S.C. § 1675a(a)(l)(D) (1994). On December 15, 1998, Timken requested Commerce to conduct a duty absorption inquiry pursuant to 19 U.S.C. § 1675(a)(4) with respect to NSK, NTN and Koyo to ascertain whether antidumping duties had been absorbed during the POR at issue. See Issues & Decision Mem. at 2. In the Final Results, Commerce determined that duty absorption had occurred for the POR. See Final Results, 65 Fed.Reg. at 11,768. In asserting authority to conduct a duty absorption inquiry under § 1675(a)(4), Commerce first explained that for “transition orders,” as defined in 19 U.S.C. § 1675(c)(6)(C) (antidumping duty orders, inter alia, orders issued on or after January 1, 1995), regulation 19 C.F.R. § 351.213(j) (1998) provides that Commerce “will make a duty-absorption determination, if requested, for any administrative review initiated in 1996 or 1998.” Issues & Decision Mem. at 2. Commerce concluded that: (1) because the antidumping duty orders on tapered roller bearings (“TRBs”) in this case have been in effect since 1976 and 1987, the orders are transitional pursuant to 19 U.S.C. § 1675(c)(6)(C); and (2) since these reviews were initiated in 1998, Commerce had the authority to make duty absorption inquiries for the administrative reviews of the 1976 and 1987 anti-dumping duty orders. See id. at 4. B. Contentions of the Parties NSK, NTN and Koyo contend that Commerce lacked statutory authority under 19 U.S.C. § 1675(a)(4) to conduct a duty absorption inquiry for the POR of the outstanding 1976 and 1987 antidumping duty orders. See NSK’s Mem. at 4, 10-15; NSKs Reply at 5-8; PI. NTN’s Mot. & Mem. Supp. J. Agency R. (“NTN’s Mem.”) at 13-14; Mem. P. & A. Supp. Mot. Pis. Koyo J. Agency R. (“Koyo’s Mem.”) at 8-14; Reply Br. Pls. Koyo Supp. Mot. J. Agency R. (“Koyo’s Reply”) at 2-7. Commerce argues that these reviews fall within its statutory authority because they involve transition orders. See Issues & Decision Mem. at 2; Def.’s Mem. at 10-14; NSK’s Mem. at 4; NTN’s Mem. at 13; Koyo’s Mem. at 8. Specifically, Commerce argues that it: (1) properly construed 19 U.S.C. §§ 1675(a)(4) and (c) as authorizing it to make a duty absorption inquiry for antidumping duty orders that were issued and published prior to January 1, 1995; and (2) devised and applied a reasonable methodology for determining duty absorption. See Def.’s Mem. at 19-22. Commerce also urges the Court to reconsider its holding in SKF USA Inc. v. United States, 24 CIT -, 94 F.Supp.2d 1351 (2000). See id. at 14-19. Timken supports Commerce’s contentions but offers no substantive explanation of its position and instead refers to its arguments raised in SKF USA Inc., 24 CIT -, 94 F.Supp.2d 1351. See Timken’s Resp. at 5-6; see also Koyo’s Reply at 6 n. 6. C. Analysis In SKF USA Inc., 24 CIT -, 94 F.Supp.2d 1351, this Court determined that Commerce lacked statutory authority under 19 U.S.C. § 1675(a)(4) to conduct a duty absorption inquiry for antidumping duty orders issued prior to the January 1, 1995 effective date of the URAA. See id. at -, 94 F.Supp.2d at 1357-59; see also NTN Bearing Corp. v. United States, 295 F.3d 1263 (Fed.Cir.2002). The Court noted that Congress expressly prescribed in the URAA that § 1675(a)(4) “must be applied prospectively on or after January 1, 1995 for 19 U.S.C. § 1675 reviews.” SKF USA Inc., 24 CIT at -, 94 F.Supp.2d at 1359 (citing § 291 of the URAA). Because Commerce’s duty absorption inquiry, its methodology and the parties’ arguments are practically identical to those presented in SKF USA Inc., the Court adheres to its reasoning in SKF USA Inc. The statutory scheme clearly provides that the inquiry must occur in the second or fourth administrative review after the publication of the antidumping duty order, not in any other review, and upon the request of a domestic interested party. Accordingly, the Court finds that Commerce did not have statutory authority to undertake a duty absorption investigation for the anti-dumping duty orders in dispute here. The Court remands this case to Commerce with instructions to annul all findings and conclusions made pursuant to the duty absorption inquiry conducted for the subject review in accordance with this opinion. III. Commerce’s Use of Affiliated Supplier’s Cost of Production for Inputs When the Cost Was Higher than the Transfer Price for NTN A. Background During the POR at issue, Commerce used the higher of the transfer price or actual cost in calculating COP and CV in situations involving inputs that NTN had obtained from affiliated producers. See Issues & Decision Mem. at 28-29; see also NTN’s Mem. at 15; Pl. NTN’s Reply Def. & Def.-Intervenor’s Feb. 16, 2001 Mem. Opposing Pis.’ Mot. J. Agency R. (“NTN’s Reply”) at 7. Commerce explained its decision as follows: Section [1677b(f)(2) of title 19 U.S.C.] directs [Commerce] to disregard transactions between affiliated parties if such transactions do not fairly reflect amounts usually reflected in sales of merchandise under consideration in the market under consideration. Further, ... [C.F.R. §§ ] 351.407(a) and (b) of [Commerce’s] regulations set[ ] forth certain rules that are common to the calculation of CV and COP. This section states that for the purpose of [§ 1677b(f)(3), ... Commerce] will determine the value of a major input purchased from an affiliated person based on the higher of: 1) the price paid by the exporter or producer to the affiliated person for the major input; 2) the amount usually reflected in sales of the major input in the market under consideration; or 3) the cost to the affiliated person of producing the major input. [Commerce adds that it has] relied on this methodology in [other reviews and that the] ... methodology has been upheld by the Court in Mannesmannrohen-Werke [AG] v. United States, [23 CIT 826, 77 F.Supp.2d 1302]. Issues & Decision Mem. at 29. In the case at bar, Commerce requested that NTN provide a list of inputs used to produce the subject merchandise and to identify those inputs that were provided to NTN by its affiliated suppliers. See Def.’s Mem. at 30. NTN provided Commerce with exhibits and indicated that it used transfer price in computing COP and CV. See id. at 30-31. In calculating COP and CV, Commerce adhered to its past methodology and used the higher of transfer price or the actual cost for NTN’s affiliated party inputs. See Issues & Decision Mem. at 29. B. Contentions of the Parties NTN alleges that Commerce erroneously used the affiliated supplier’s COP for inputs when it was higher than the transfer price. See NTN’s Mem. at 3, 15-16; NTN’s Reply at 16-18. Specifically, NTN maintains that Commerce misapplied the major input rule described in 19 U.S.C. § 1677b(f)(3) (1994), and that Commerce failed to point to any reasonable grounds on which Commerce based its belief that NTN’s reported COP of affiliated parties was below the actual COP. See NTN’s Mem. at 15-16. According to NTN, a plain language reading of 19 U.S.C. § 1677b(f) makes clear that “the automatic recalculation of reported COP and CV data contemplated in 19 C.F.R. § 351.407 is not contemplated in the statute itself.” Id. at 16 (distinguishing Mannesmannrohen-Werke AG, 23 CIT 826, 77 F.Supp.2d 1382). NTN requests that if this Court should sustain Commerce’s methodology as reasonable and in accordance with law, the Court then remands this issue to Commerce to rectify the ministerial error committed in calculating “a variable ... to account for the difference between transfer price and actual cost.” Issues & Decision Mem. at 28; see NTN’s Mem. at 17-18; NTN’s Reply at 9. Commerce contends that it acted in accordance with the statutory mandate and applied the provision reasonably under the circumstances. See Def.’s Mem. at 29-31. Timken supports Commerce’s position and adds that “commercial reality” dictates that sales below cost are usually not at market prices. See Timken’s Resp. at 17. According to Timken, “home market sales of merchandise used to determine normal values which are below cost are by statute ‘outside the ordinary course of trade.’ ” Id. (citation omitted). C. Analysis The issue presented by NTN is whether Commerce has statutory authority to use the higher of the transfer price or actual cost in calculating COP and CV in situations involving inputs that NTN had obtained from affiliated producers. In NSK Ltd. v. United States, 26 CIT -, 217 F.Supp.2d 1291 (2002) (“NSK 2002”), this Court affirmed Commerce’s decision to use NTN’s affiliated supplier’s COP for major inputs when COP was higher than the transfer price. The Court reasoned that 19 U.S.C. § 1677b(b)(3)(A) is to be read in conjunction with the Special Rules cited in §§ 1677b(f)(2) and (3) that authorize Commerce, in calculating COP and CV, to: (1) disregard a transaction between affiliated persons if the amount representing an element does not fairly depict the amount usually reflected in sales of merchandise under consideration in the market under consideration; and (2) determine the value of the major input on the basis of the information available regarding COP if Commerce has reasonable grounds to believe or suspect that an amount represented as the value of the input is less than the COP of the input. In determining whether transaction prices between affiliated persons fairly reflect the market, this Court acknowledged that Commerce’s practice has been to compare the transaction prices with market prices charged by unrelated parties. Commerce’s practice was later reduced to writing in 19 C.F.R. § 351.407 (1998), a regulation which implements 19 U.S.C. § 1677b(f). Commenting on the regulation, Commerce stated that it believes that the appropriate standard for determining whether input prices are at arm’s length is its normal practice of comparing actual affiliated party prices to or from unaffiliated parties. This practice is the most reasonable and objective basis for testing the arm’s length nature of input sales between affiliated parties, and is consistent with [19 U.S.C. § 1677b(f)(2)]. Def.’s Mem. at 27 n. 6 (citation omitted). Pursuant to the major input rule contained in 19 U.S.C. § 1677b(f)(3), in calculating COP or CV, Commerce values a major input purchased from an affiliated supplier using the highest of the following: (1) the transfer price between the affiliated parties; (2) the market price between unaffiliated parties; and (3) the affiliated supplier’s COP for the major input, since, in Commerce’s view, the affiliation between the respondent and its suppliers “creates the potential for the companies to act in a manner that is other than arm’s length” and gives Commerce reason to analyze the transfer prices for major inputs. Def.’s Mem. at 28 (citing Final Results of Antidumping Duty and Administrative Review of Silicomanganese From Brazil, 62 Fed.Reg. 37,869, 37,871-72 (July 15, 1997)). In addition, if Commerce disregards sales that failed the below-cost sales test pursuant to 19 U.S.C. § 1677b(b)(l) in the prior review with respect to merchandise of the respondent being reviewed, Commerce has “reasonable grounds to believe or suspect” that sales under consideration might have been made at prices below the COP. See 19 U.S.C. § 1677b(b)(2)(A)(ii) (1994). Commerce disregarded sales that failed its cost test under 19 U.S.C. § 1677b(b) during the previous review with respect to NTN’s merchandise. See Def.’s Mem. at 29. For this reason, Commerce concluded that it had reasonable grounds to believe or suspect that sales of the foreign like product under consideration may have been made at prices below the COP. See 19 U.S.C. § 1677b(b)(2)(A)(ii). Therefore, Commerce initiated a COP investigation of sales by NTN in the home market. See Preliminary Results, 64 Fed.Reg. at 53,-327; see also Def.’s Mem. at 30. As part of its investigation, Commerce distributed a questionnaire, which, in pertinent part, requested NTN to provide COP and CV information. See Def.’s Mem. at 30. Specifically, Commerce requested NTN to: (1) list all inputs used to produce the merchandise under review; (2) identify those inputs that NTN received from affiliated persons; (3) provide the per unit transfer price charged for the input by the affiliated producer; (4) provide the COP incurred by the affiliated person in producing the major input; and (5) specify the basis used by NTN to value each major input for purposes of computing the submitted COP and CV amounts. See id. In response, NTN referred Commerce to a number of NTN’s exhibits and stated, among other things, that transfer price was used in computing COP and CV. See Def.’s Mem. Ex. 1 (proprietary version). NTN also indicated that it used the transfer price for computing COP and CV. See id. at 31. Therefore, consistent with its interpretation of 19 U.S.C. §§ 1677R2) and (3), Commerce used the higher of the transfer price or the actual cost in calculating COP and CV in the situations where NTN used parts purchased from affiliated persons. See id. While NTN argues that there is no record evidence that the affiliated party inputs did not “reflect the amount usually reflected in [the] sales of ... merchandise ... under consideration” and that the statute makes no reference to cost, NTN’s Mem. at 16 (relying on 19 U.S.C. § 1677b(f)(2)), the Court holds that Commerce acted reasonably and in accordance with 19 U.S.C. § 1677b(f)(3) when it chose to determine the value of a major input on the basis of the information available regarding COP. See NSK 2002, 26 CIT at -, 217 F.Supp.2d at 1320-22; see also SKF USA Inc. v. United States, 24 CIT -, - 116 F.Supp.2d 1257, 1261-68 (2000). NTN argues that even if Commerce was correct in adjusting NTN’s COP and CV for affiliated party inputs, Commerce committed a ministerial error in the calculation of this adjustment in that Commerce’s methodology failed to capture NTN’s actual cost accurately. See NTN’s Mem. at 17. According to NTN, Commerce’s methodology erred by making an adjustment for the difference between transfer price and supplier’s actual cost, rather than between supplier’s actual cost and NTN’s actual cost. See Issues & Decision Mem. at 28; NTN’s Mem. at 17; Def.’s Mem at 34; see also NTN’s Reply at 9. Commerce notes that NTN calculated variances by comparing its standard costs to its actual costs which are, for all inputs it purchased from all suppliers, based on the transfer prices from each supplier. As a result, the affiliate’s costs ... are based on transfer prices. Therefore, NTN’s reported actual costs are not an accurate basis on which to calculate COP and CV. Thus, it was appropriate to use the supplier’s actual cost, and also to make an adjustment for the difference between the supplier’s actual cost and the transfer price when the supplier’s actual cost was higher than the transfer price. Issues & Decision Mem. at 29-30 (emphasis added). Commerce further asserts that the “variances” to which NTN refers are based upon the transfer price of affiliated suppliers, and not the actual cost of the input to affiliated suppliers. Accordingly, the Court agrees that NTN’s reported actual costs cannot be an accurate basis upon which to calculate COP and CV. It is not the role of this Court to determine what methodology Commerce should or should not use in its determination, but instead to decide whether Commerce’s chosen methodology is reasonable. “[Commerce] is given discretion in its choice of methodology as long as the chosen methodology is reasonable and [Commerce’s] conclusions are supported by substantial evidence in the record.” Federal-Mogul Corp. v. United States, 18 CIT 785, 807-08, 862 F.Supp. 384, 405 (1994) (citing Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 404-05, 636 F.Supp. 961, 966 (1986), aff'd, 810 F.2d 1137 (Fed.Cir.1987)); see also Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 936 (Fed.Cir.1984) (stating that “[the Court’s] role is limited to deciding whether [Commerce’s] decision is ‘unsupported by substantial evidence on the record, or otherwise not in accordance with law* ”). After careful examination of the record of this case and NTN’s assertion that Commerce’s methodology is distortive, this Court sustains Commerce’s methodology in using NTN’s supplier’s actual cost. IV. Commerce’s Denial of a Price-Based Level of Trade Adjustment A. Contentions of the Parties NTN contends that Commerce improperly denied a price-based level of trade (“LOT”) adjustment when matching constructed export price (“CEP”) sales to sales of the foreign like product, citing Borden Inc. v. United States, 22 CIT 233, 4 F.Supp.2d 1221 (1998), as support. See NTN’s Mem. at 18-21. See generally Borden, 22 CIT 233, 4 F.Supp.2d 1221, rev’d, 2001 WL 312232 (Fed.Cir. Mar.12, 2001). In particular, NTN argues, inter alia, that Commerce incorrectly determined NTN’s CEP LOT because Commerce failed to use the sale to the first unaffiliated purchaser in the United States to determine NTN’s CEP LOT. See Issues & Decision Mem. at 35; NTN’s Mem. at 19-21. NTN requests that the Court remand the LOT issue to Commerce to grant NTN a price-based LOT adjustment when its CEP LOT is different from the LOT of the comparison foreign like product. See NTN’s Mem. at 21. Commerce, in turn, argues that it properly determined the LOT for NTN’s CEP sales based upon the CEP. See Def.’s Mem. at 35-36. Commerce used the CEP price to determine the LOT of CEP sales, and found that NTN had “no home market level of trade equivalent to the CEP level of trade because there were significant differences between the selling activities associated with the CEP and those associated with each of the home market [LOTs].” Id. at 35; see also NTN’s Mem. App. 5 at 6-7. Commerce points out that CEP is defined in 19 U.S.C. § 1677a(b) (1994) as the price at which the subject merchandise is first sold in the United States by a seller affiliated with the producer to an unaffiliated purchaser, as adjusted under §§ 1677a(c) and (d). See Def.’s Mem. at 39. According to Commerce, the adjusted CEP price is to be compared to prices in the home market based on the same LOT whenever it is practicable; when it is not practicable and the LOT difference affects price comparability, Commerce considers making a LOT adjustment. See id. at 39-40. Commerce makes a CEP offset when Commerce is not able to quantify price differences between the CEP LOT and the LOT of the comparison sales, and if NV is established at a more advanced state of distribution than the CEP LOT. See id. at 41. Commerce claims that it applied its usual methodology to determine CEP LOT and determined that NTN’s LOT and home market LOT were not equivalent. See id. at 43. According to Commerce, “in order to calculate a[LOT] adjustment, the CEP [LOT] must exist in the home market.” Id. Since there was a difference between NTN’s LOT and home market CEP LOT, Commerce “could not determine a [LOT] adjustment based upon NTN’s home market sales of merchandise under review.” Id.; Issues & Decision Mem. at 36. Alternatively, Commerce calculated “NV at the same [LOT] as the [United States] sale to the unaffiliated customer and, when comparisons were to sales at a different [LOT], made a CEP offset_” Def.’s Mem. at 43 (citing NTN’s Mem.App. 5 at 6-7). Commerce contends that NTN provided no further information to establish a basis for calculating a LOT adjustment. See id. Timken generally agrees with Commerce’s positions and adds that the Court should uphold Commerce’s methodology since NTN admits that “transfer price was used in computing COP and CV” in its answer to Commerce’s questionnaire. Timken’s Resp. at 17 (referring to Def.’s Mem. Ex. 1 at 64). B. Analysis In Micron Tech., Inc. v. United States, 243 F.3d 1301 (Fed.Cir.2001), the Court of Appeals for the Federal Circuit (“CAFC”) held that the plain text of the antidumping statute and the Statement of Administrative Action (“SAA”) require Commerce to deduct the expenses enumerated under 19 U.S.C. § 1677a(d) before making the LOT comparison. The court examined 19 U.S.C. § 1677b(a)(l)(B)(i) (1994), which provides that Commerce must establish NV “to the extent practicable, at the same level of trade as the export price or [CEP],” and 19 U.S.C. § 1677a(b), which defines CEP as “the price at which the subject merchandise is first sold (or agreed to be sold) in the United States ... as adjusted under subsections (c) and (d) of this section(emphasis added). The court concluded that “[r]ead together, these two provisions show that Commerce is required to deduct the subsection (d) expenses from the starting price in the United States before making the level of trade comparison.... ” Micron, 243 F.3d at 1315. The court further stated that this conclusion is mandated by the SAA, which states that “ ‘to the extent practicable, [Commerce should] establish normal value based on home market (or third country) sales at the same level of trade as the constructed export price or the starting price for the export price. ’ ” Id. (citing SAA at 829) (emphasis in original). In its reply brief, NTN acknowledges the Micron decision but asserts that the CAFC’s interpretation of the relevant subsections under 19 U.S.C. § 1677b (1994) conflicts with the URAA, “which requires [Commerce] to make a LOT adjustment if the difference in the level of trade affects price comparability, based on a pattern of consistent price differences.” NTN’s Reply at 7 (citations omitted). Despite this opposition, this Court adheres to its reasoning in NTN 2002, 26 CIT at -, 186 F.Supp.2d at 1265-66, and finds that Commerce properly made § 1677a(d) adjustments to NTN’s starting price in order to arrive at CEP and make its LOT determination. The Court also finds that Commerce’s decision to deny NTN a LOT adjustment is supported by substantial evidence. Section 1677b(a)(7)(A) permits Commerce to make a LOT adjustment “if the difference in level of trade ... involves the performance of different selling activities[ ] and ... is demonstrated to affect price comparability, based on a pattern of consistent price differences between sales at different levels of trade in the country in which normal value is determined.” 19 U.S.C. § 1677b(a)(7)(A). Yet, Commerce does not make a LOT adjustment when the record at issue does not provide adequate evidence to support such an adjustment. See Issues & Decision Mem. at 35. For this POR, Commerce examined the record and concluded that NTN’s home market LOT was not equivalent to its CEP LOT. See id. Furthermore, “Commerce had no other information that provided an appropriate basis for determining a[LOT] adjustment.” Def.’s Mem. at 43. See generally SAA at 830. “As a result, because the record [failed] to establish that there [wa]s any pattern of consistent price differences between the relevant LOTs, [Commerce] did not make a LOT adjustment for NTN when [Commerce] matched a CEP sale to a sale of the foreign like product at a different LOT.” Issues & Decision Mem. at 35. Accordingly, the Court finds that Commerce acted within the directive of the statute in denying NTN the LOT adjustment and instead, granting a CEP offset. See 19 U.S.C. § 1677b(a)(7). V. Commerce’s Reallocation of NTN’s United States Indirect Selling Expenses Without Regard to Levels of Trade A. Background In the Final Results, 65 Fed.Reg. at 11,767, Commerce calculated NTN’s United States and home market selling expenses without regard to LOT. See Issues & Decision Mem. at 36-38. NTN argued that Commerce should have relied on NTN’s reported United States and home market selling expenses based on LOT instead of reallocating these selling expenses without regard to LOT. See id. at 36. Furthermore, NTN claims that Commerce’s rejection of NTN’s reported LOT selling expenses “contradicts the evidence on the record in this review [since Commerce concluded] in the [Preliminary [R]esults ... that different LOTs existed in both the [United States] and home markets for sales of subject merchandise.” Id. at 36-37. NTN also points to data it supplied Commerce in response to Commerce’s questionnaire illustrating that United States original equipment manufacturer (“OEM”) sales incurred higher selling expenses than both past market and distributor sales, and that distributor sales incurred higher selling expenses than post market sales. See id. at 37. “NTN states that home market expenses also can be identified by LOT and argues that [Commerce’s] reallocation [of NTN’s United States indirect selling expenses] without regard to LOT is distortive.” Id. Timken, in turn, contends that the evidence on the record supports Commerce’s reallocation of NTN’s home market and United States indirect selling expenses without regard to LOT. See id. Timken asserts that NTN has not adequately shown that its allocations accurately reflect the manner in which NTN incurs expenses for its sales, and thus Commerce should not alter its methodology of reallocating NTN’s home market and United States selling expenses without regard to LOT. See id. Commerce generally agrees with Timken. See Issues & Decision Mem. at 37-38. Commerce responded that for a majority of the expenses under this POR, it determined that NTN’s methodology for allocating its selling expenses based on LOTs did not bear any relationship to the manner in which NTN incurred these United States and home market selling expenses and its methodology led to distorted allocations. See id. at 37. Commerce asserts that in Timken Co. v. United States, 20 CIT 645, 653, 930 F.Supp. 621, 628-29 (1996), Commerce was to accept “NTN’s LOT-specific allocations and per-unit LOT expense adjustment amounts only if NTN’s expenses demonstrably varied according to LOT.” Id. Acting in accordance with Timken Co., Commerce in its remand results did not allow NTN’s LOT-specific allocations “due to the lack of quantitative and narrative evidence on the record demonstrating that the expenses in question demonstrably varied according to LOT....” Issues & Decision Mem. at 38. Commerce argues that after careful review of the administrative record for this POR, it finds that “in most instances no evidence exists demonstrating that NTN’s home market and [United States] expenses allocated by LOT actually varied according to LOT.” Id. Commerce further concluded that the data provided by NTN in its response to Commerce’s questionnaire indicates that NTN incurred certain United States packing material and packing labor expenses when selling to only one United States’s LOT. See id.; see also Defi’s Mem. at 45 n. 12. After reviewing NTN’s response to its questionnaire, Commerce found that NTN clearly indicates that “certain of NTN’s packing expenses individually differed by LOT.” Issues & Decision Mem. at 38. Because these expenses were unique to a single LOT, NTN 1) allocated each total expense amount solely to this LOT[;] 2) calculated a single allocation ratio for this LOT[;] and 3) applied this ratio only to [United States] sales at this LOT.... Therefore, for [the Preliminary Results, 64 Fed.Reg. 53,323, Commerce] applied [Commerce’s] recalculated ratios for certain of NTN’s [United States] packing and [United States] labor expenses only for sales to the one LOT for which these expenses were incurred. Id. After further review, Commerce also concluded that NTN’s United States packing labor and material expenses varied with regard to LOT. See id. According to specific data provided by NTN, Commerce points out that NTN’s different methods of packing depend upon LOT. See id. Commerce states that since NTN has provided no further record evidence that home market expenses were incurred differently depending on LOT, Commerce properly accepted only NTN’s allocation of home market packing expenses according to LOT. See id. B. Contentions of the Parties NTN contends that Commerce’s decision to reallocate NTN’s selling expenses violates Commerce’s mandate to administer the antidumping laws. See NTN’s Mem. at 24-27. NTN states that Commerce is in error primarily because: (1) “the expenses in question varied across [LOTs] in keeping with the requirements of [Timken Co., 20 CIT 645, 930 F.Supp. 621; (2) ] NTN’s methodology was previously accepted by [Commerce] and has not changed[; and (3) ] the effect of reallocating these expenses is to void [Commerce’s] LOT determination.... ” Id. at 24 (citations omitted). Moreover, NTN argues that Commerce erred in basing its decision to reallocate NTN’s reported expenses on the conclusion that the expense methodology NTN employed “bore no relationship to the manner in which the expense[s were] incurred.” Id. According to NTN, sufficient record evidence exists for Commerce to find that NTN’s indirect and home market selling expenses varied with regard to LOT. See id. at 24-25. Citing to Böwe-Passat v. United States, 17 CIT 335, 340 (1993), NTN argues that Commerce’s reallocation of NTN’s United States indirect selling expenses without regard to LOT is contrary to Commerce’s statutory role of administering the antidumping law to the most accurate extent possible. See id. at 27. Commerce responds that no sufficient record evidence exists illustrating that all of NTN’s United States selling expenses and home market selling expenses varied demonstrably with regard to LOT. See Def.’s Mem. at 45-46. Commerce refers to the holdings in NTN Bearing Corp. of Am. v. United States, 23 CIT 486, 83 F.Supp.2d 1281 (1999) and NTN Bearing Corp. of Am. v. United States, 19 CIT 1221, 905 F.Supp. 1083 (1995) and asserts that this Court uphold Commerce’s reallocation of NTN’s United States and home market indirect selling expenses without regard to LOTs. See id. at 46. Timken generally supports Commerce’s arguments and argues that the record evidence supports Commerce’s decision to reject NTN’s allocation of United States and home market indirect selling expenses. See Timken’s Resp. at 18 (citing Issues & Decision Mem. at 37-38). Furthermore, Timken contends that it has been Commerce’s practice to reject NTN’s methodology for reporting selling expenses in various reviews. See id. (citing Final Results of Antidumping Duty Administrative Reviews of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan, 63 Fed.Reg. 63,860 (Nov. 17, 1998), and Final Results of Antidumping Duty Administrative Reviews of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan, 63 Fed.Reg. 2558 (Jan. 15,1998).) NTN replies to Commerce and Timken’s assertions by stating that neither has brought forth any substantial legal argument that supports Commerce’s decision to adjust NTN’s sales for selling expenses without regard to LOT. See NTN’s Reply at 9-10. NTN also proposes that Commerce failed to address the record in this POR, and asserts that precedent makes clear that “the record for each administrative review is separate from, and independent of, each previous administrative review.” Id. at 10 (citing NSK Ltd. v. United States, 16 CIT 275, 277, 788 F.Supp. 1228, 1229 (1992), in turn citing Beker Indus. Corp. v. United States, 7 CIT 199, 585 F.Supp. 663 (1984)). C. Analysis The Court agrees with Commerce that NTN failed to provide adequate evidence illustrating that all of NTN’s United States selling expenses and home market selling expenses varied demonstrably with regard to LOT. In making its final determination, Commerce followed the standard set by this Court in Timken Co., 20 CIT at 651-53, 930 F.Supp. at 627-29 that Commerce is to deny a LOT adjustment if Commerce finds that expenses did not vary according to LOT. In the case at bar, NTN purports to show that it incurred different selling expenses at different trade levels by pointing to specific exhibits included in its proprietary memorandum. See NTN’s Mem. at 25 (proprietary version). After a review of the record, Commerce concluded that the questionnaire responses that NTN provided for some of its United States packing and material expenses indicate that such expenses were incurred in connection with only one United States LOT. See Issues & Decision Mem. at 38. In the Preliminary Results, 64 Fed.Reg. 53,323, Commerce accordingly “recalculated ratios for certain of NTN’s [United States] packing and ... labor expenses only for sales to the one LOT for which these expenses were incurred.” Issues & Decision Mem. at 38 (emphasis added); see Prelim. Analysis Mem. at 7-8. Commerce further determined that although NTN’s exhibits “clearly demonstrate that different methods of packing are required depending upon LOT,” NTN provides no evidence that illustrates that all of NTN’s selling expenses were incurred differently with regard to LOT. Issues & Decision Mem. at 38; see Prelim. Analysis Mem. at 7-8. Accordingly, in the Final Results, 65 Fed. Reg. 11,767, Commerce only accepted NTN’s allocation of home market packing expenses according to LOT. See Issues & Decision Mem. at 38. In NTN 2002, 26 CIT at -, 186 F.Supp.2d at 1268, this Court made clear that NTN has the burden before Com-meree to establish its entitlement to a LOT adjustment. NTN’s failure to provide the requisite evidence with regard to selling expenses, other than NTN’s home market packing expenses, compels the Court to conclude that it has not met its burden of demonstrating that Commerce’s denial of the LOT adjustment was not supported by substantial evidence and was not in accordance with law. See NSK Ltd. v. United States, 21 CIT 617, 635-86, 969 F.Supp. 34, 55 (1997), aff'd, NSK Ltd. v. Koyo Seiko Co., Ltd., 190 F.3d 1321, 1330 (Fed.Cir.1999). For the reasons stated above, the Court sustains Commerce’s methodology. VI. Commerce’s Exclusion of Certain Home Market Sales to Affiliated Parties From the Normal Value Calculation A. Background During the POR, Commerce determined whether NTN’s affiliated party sales should be used for purposes of calculating NV by employing its standard arm’s-length test. See Def.’s Mem. at 47. Specifically, Commerce compared NTN’s home market selling prices to NTN’s affiliated and unaffiliated parties by using Commerce’s 99.5% arm’s-length test in which Commerce computes the weighted average price of all sales to each affiliated party by part number and the weighted average price of ah sales of each part number to unaffiliated parties .... [F]or every part number sold to both unaffiliated and affiliated parties, the program calculates, for each related party, ratios of the affiliated and unaffiliated weighted average prices; these ratios are then weight-averaged to obtain the average of all part numbers sold to each related party ... [Commerce] only eliminates sales to a particular affiliated party from the calculation of NV when the average of all of these comparisons for that affiliate is less than 99.5 percent. Issues & Decision Mem. at 39. B. Contentions of the Parties NTN contends that Commerce erred in applying the arm’s-length test because Commerce “compare[d] the weighted average price for unrelated sales [to the price] for individual related sales, and [failed to] consider other important factors such as quantity or payment terms of specific sales.” NTN’s Mem. at 28. NTN further argues that no statutory precedent establishes Commerce’s ability to measure arms-length transactions by such a test. See id. To illustrate its contention, NTN provides a hypothetical example attempting to demonstrate that Commerce’s arm’s-length test is distortive. See id. at 28-29. Alternatively, NTN suggests that Commerce lower the threshold from 99.5 to 95 percent to ensure that the results “truly reflect the range of prices in [NTN’s] transactions.” Id. at 29. NTN further asserts that Commerce incorporate additional factors, such as quantity or payment terms of specific sales, in the application of its test. See id. at 29-30; NTN’s Reply at 12. In response, Commerce cites to 19 U.S.C. § 1677b(a)(6) (1994) highlighting the following: If the foreign like product is sold or, in