Slip Op. 05-23 UNITED STATES COURT OF INTERNATIONAL TRADE Before: Judge Judith M. Barzilay

____________________________________ Slater Steels Corporation, et al. , :

Plaintiff s, :

v. : United Sta

tes, : Defend ant. :

____________________________________ Consol. Ct. No. 02-00551

____________________________________ : Viraj Group, :

Plaintiff, : v. : United Sta

tes, : Defend ants, and : Slater Steels Corporation, et al. , :

Defend ant-I nterven ors. ____________________________________: [Case remanded to the United States Department of Commerce.] Decided: February 17, 2005 Collier Shannon Scott, PLLC, ( Robin H. Gilbert

), for Pla intiffs a nd DefendantIntervenors Slater Steels Corp., et al. John M. Gloninger and William H. Crow II , Economic

Consultant s for Plaintiffs and Defend ant-I nterven ors. Miller & Chev

alier Chartered , (

Peter Koe

nig ), for Plaintiff Viraj Group. Peter D. Keisler , Assistant Attorney Gene ral, United States Department of Justice, DavidConsol. Ct. No. 02-00551 Page 2

1 The reg ulation pr ovides: (f) Tre atment of

affilia ted produ cers in a ntidumping

procee dings. (1) I n gene ral. I n an antid umping pr

oceedin g under this part, the Secr

etary will treat two or more affiliated producers a s a single entity w here those producers have producti on facil ities for

similar or

identica l product s that would not re quire substantial retooling of either facility in order to restructure manufacturing priorities and the Secretary concludes that there is a significant potential for the manipulation of price and production. 19 C.F.R. § 351.401(f)(1) (emphasis added). M. Cohen , Director, Commercial Litiga tion Branch, Civil Division, ( Jeanne E. Davidson ), Deputy Direc

tor, ( Stephen C. Tosini ), Attorney, Commerc ial Litigation Branc h, Civil Division, Christine J

. Sohar, Office of the Chief Counsel for I mport Administration, United States Department of Commerce, o f counse l, for De fendant

.

OPINION B ARZI LAY , J UDGE : I NTRODUCTI ON The court has twice remanded this case, dire cting Defendant, the United States Department of Commerce ( “The De partmen t,” “Comme

rce” or “gove rnment” ), to expla

in its interpretation and application of 19 C.F.R. § 351.401(f) (2000) 1 in collapsing three companies of the Viraj Group, an Indian importe r. See Slater Steels Corp. v. United States , 27 CIT __, 279 F. Supp. 2d 1370 (2003) (“ Slater I ”); Slater Steels Corp. v. United States , S li p Op . 04 -22 , 28 CIT __, 316 F. Supp. 2d 1368 (2004) (“ Slater II ”). Commerce timely f

iled its Final Results of Redetermination (“

Remand R esults II

”). Following the filing of Remand R esults II , Plaintiffs requested that the court consider and apply its recent decision in Carpenter Tech. Corp. v. United States , Slip Op. 04-103 (Aquilino, Judge) (Aug. 16, 2004) (“ Carpente r” ), a related litigationConsol. Ct. No. 02-00551 Page 3

2 Viraj Group did not submit a response to the court’s letter. concerning the same companies of the Viraj Group, but addressing a challeng e to a different period of review and involving differe nt merchandise – stainless steel wire rod. Finding the Carpente r analysis persua sive, the court instructed Commerce to indicate what factual c hanges had occurred prior to the review at issue in this case , such that its decision to collapse the Viraj Group companies should not be remanded as it was in Carpenter. Defend ant has su bmitted its answer to the court’s inquiry , see Mem. in Response to the Court’s Letter , Nov. 12, 2004 (“ Def.’s Response Mem. ”), and Plaintiffs and Defendant-I ntervenors have submitted their response, see Pls.’s Reply to Def.’s Mem. in Response to the Court’s Letter , Dec. 2, 2004 (“ Pls. Reply” ). 2

B ACKGROUND In thi s consolid

ated action, Plain

tiffs and Defend ant-I nterven ors, cer tain dome stic companies, challenge Commerce’s a dministrative decision to collapse the affiliated companies of the Vira j Group for the pur

pose of c alculati

ng a dum ping mar gin ag ainst the i

mports of c ertain subj ect me rchand ise en tered d uring t he peri od of r eview (“POR ”) from Februa ry 1, 2000 throu gh January 31, 2001 (“the 2000- 2001 review”). Commerce determined to collapse the following affiliated companies of the Viraj Group: Viraj Alloy s, Ltd. (“VAL”), Viraj Impoexpo, L td. (“VIL”), and Viraj Forging s, Ltd. (“VFL”). See Fina l Results o f Antidump ing Duty Administrative Review , 67 Fed. Reg. 45,956 (July 11, 2002) , amended by 67 Fed. Reg. 53,336 (Aug. 15, 2002) (“

Final Resu lts ”); Issues and Decision Memorandum for the Final Results of the Administrative Review of Stainless Steel Bar from India (July 5, 2002) (“ Decision Mem. ”). Commerce concluded that VAL , VIL , and VFL met the collapsing requirements of 19 C.F.R. §Consol. Ct. No. 02-00551 Page 4

3 The subject merchandise in the POR at issue in this case is stainless steel bar, which included “articles of stainless steel in straight lengths that ha ve been either hot-rolled, forge d, turned, c old-dra

wn, cold-rolled or

otherwis e cold-f

inished, or groun

d, having a unifor m solid cross se ction along their

whole len

gth in the shape of circles , segme

nts of cir cles, ova ls, rectangles (including square s), triangles, hexagons, octagons, or othe r polygons.” Final Resu lts , 67 Fed. Reg. at 45,957.

4 In thi s consolid

ated action, thes e compan ies appe ar as bot

h Plaintiff

s and DefendantIntervenors and will be re ferred to in this opinion as “Plaintiffs.”

5 Familiarity with Slater I, Slater II and Carpenter is presumed. 351.401( f), find

ing that “VAL and VI L ca n produc e subjec

t mercha ndise 3 ( i.e. , similar or identical products) and can continue to do so, independently or under existing leasing agreements, without substantial retooling of their production facilities.” Decision Mem. , cmt. 1. Commerce also found “a significant potential for the ma nipulation of price and production among VIL , VAL, and VFL .” Id. As a collapsed entity, the Viraj Group received a de minimi s dumping margin in the Final Resu lts

. Plaintiff s and Def endant- Inte

rvenors , Slater St

eels Corpora tion, Carp enter Te chnolog y Corporation, Electr

alloy Corpora tion, and Crucible

Specialt y Metals Division of Crucible Materials Corporation 4 , challe nged th is determ ination a s a misapplication of the collapsing regulation before the court. In Slater I and Slater II

, the court held that Commerce’s decision to collapse the Viraj Group was not supported by substantial evidence on the record, remanding the Department’s final re sults on bot

h occasi ons. 5 Following Commerce’s filing of Remand Results II , Plaintiffs requested that the court consider Carpenter , a related litigation concerning the same companies of the Viraj Group, but addressing a cha llenge to a different POR (from 1999 to 2000) and involving different merchandise – stainless steel wire r od. See Slip Op. 04-103. In Carpenter , the Court reviewed whether Commerce’s dec ision to collapse the Viraj Group was supported byConsol. Ct. No. 02-00551 Page 5

6 Stainless Steel Wire Rod from India; Final Results of Antidumping Duty Administrative Review , 65 Red. Reg. 31,302 (May 17, 2000). substantial evidence where Commerce, at a pr ior review (from 1997 to 1998) 6 involving the same subject merchandise, did not collapse the same companies. See id. at 9-10. Notably, that prior review was affirmed on appeal in Viraj I. See Viraj I , 25 CIT at 1031-32 (holding that Commerce’s decision to value steel billets purchased by VILfrom VAL based on the intercompany transf

er price (paid by

VIL to VAL) was supported by substantial evidence). The Carpente r decision relied on its finding in Viraj I that VAL and VI L had production facilities sufficiently diffe

rent as to require substantial retooling of either fa cility in order to restruc

ture manufacturing priorities. See Carpenter , Slip Op. 04 -103, at 9 . The Cour t found tha

t the same difference between production facilities remained during the period under its review , even though Commerce was able to show that in the previous period of re view VAL did not produce subject merchandise and VFL neither produced nor exported the merchandise. Id. The Court held that these changes were insuff icient to support Commerce’s reversal of its initial decision not to collapse, and the Court remanded to the agenc y for ca lculation and imposition of individual antidumping-duty marg in upon VIL

and VFL. Id. at 10. In light of Carpenter , the court directed Commerce to indicate what, if any , factual changes have occurr

ed prior to the period of review at issue in this action, such that its decision to collapse the Viraj Group companies should not be remanded as it was in Carpenter. Defend ant filed its Memoran dum in Res

ponse to Co urt’s Lette

r and Plaintiffs filed their Reply to Defendant’s Memorandum.Consol. Ct. No. 02-00551 Page 6 S TAND ARD O F REVIEW The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(c) (2004). The court “m ust sustain

‘any determination, fin

ding or c onclusion

found’ by

Commerce

unless it is ‘unsupported by substantial evidenc e on the record, or otherwise not in accor dance with the law.’” Fujitsu General Ltd. v. United States , 88 F.3d 1034, 1038 (Fed. Cir. 1996) (quoting 19 U.S.C. § 1516a(b)(1)(B)). “I n applying this standar

d, the court affirms [the agency 's] factual determinations so long as the y a re rea sonable a

nd suppor ted by the rec ord as a w

hole, eve n if there is some evidence that detracts from the agency’s c onclusions.” Olympia Indus., Inc. v. United States , 22 C IT 387, 3 89, 7 F . Sup p. 2d 9 97, 10 00 (19 98) (ci ting Atlantic Sugar, Ltd. v. United States , 744 F.2d 1556, 1563 (Fed. Cir. 1984)). The court may not re-weigh the evidence or substitute its own judgment for that of the agency

. See Granges Metallverken AB v. United States , 13 CIT 471, 474, 716 F. Supp. 17, 21 (1989). Additionally, “absent a showing to the contrary , [the agency

] is presumed to have considered all of the evidence in the re cord.” Nat'l Ass'n of Mirror Mfrs. v. United States , 12 CIT 771, 779, 696 F. Supp. 642, 648 (1988). D ISCU SSI ON I. Histo ry of V

iraj ’s P arti cipat

ion in the Adm

inist rati ve Re views VIL first participated in an antidumping duty review as a new shipper of stainless steel bar in 1995. See, e.g., Notice of Initiation of New Shipper Antidumping Duty Administrative Review , 60 Fed. Reg. 58,598 (Nov. 28, 1995) (conce rning the POR from February 1, 1995 through July 31, 1995) (here inafter “the new shipper review”) . The new shipper review included the follow

ing information a

bout the Viraj Gro

up: (1) VA

L poss essed pr

oduction f

acilitie s to produce stainless steel billets/rounds; (2) VIL possessed production facilities to produce brightConsol. Ct. No. 02-00551 Page 7

bar; and (3) VFL

did not produce stainless steel bar during the period of re view. See VIL’s Response s to the De

partment o

f Commerc e’s Que

stionnaire

for ARP 2/1/95- 7/31/95 (Pu blic Version) (hereinafter “Ne w Shipper Questionnaire”). VI L specified that its own manufactur ing facil itie s incl uded “ bar man ufactu ring un it fac ilit ies fo r solu tion anneal ing, p ickli ng, dra wing, turning, grinding, cutting, polishing a nd packing.” Id. at 3. VIL ’s response described VAL as “a steel manufacturing unit, including of stainless steel rounds and billets.” Id. at 3. VIL stated that “[t]he raw material used for the manufacture of ba rs [was] being received from [its] affiliated sister company [VAL].” Id. at 26. The input mate

rials fr om VAL were ide ntified a s “stainle ss steel bars” and “stainless steel wire rods.” Id. at 114-115. VIL noted that VFL produce d and sold stainless steel flanges and no other product. Id. at 4. VIL explained that the cost for input raw materials obtained domestically was based on the “direct material cost of purc hase plus transportation costs.” Id. at 29. Furthermore, the petitioners in the new shipper re view asked Commerce to consider VAL a s a respondent in the review pinpointing VI L’s reported purc

hases of stainless steel bars from VAL. See Letter to the Secretary of Commerce from Viraj Impoexpo Ltd, Mar. 27, 1996. In the 1998-1999 administrative review tha t followed the first shipper review, VI L’s response s identifi ed the sa me princ ipal facts: 1) VAL produce s raw mat

erials ( i.e., sta

inless ste el bars f

or stainle ss steel br

ight bars, VIL’s Questionnaire Responses , June 4, 1999, at 8 (“1998-1999 Questionn aire ”); 2) VIL manufactures stainless steel bright bars, id. at 118, purchasing hot rolled bars from VAL, VIL’s Re

sponses to

Suppleme

ntal Quest

ionnaire , Feb. 10 , 2000, pa ra. [15]; 3) VFL manufac

tures stainless steel pipe fittings, i.e. flanges, 1998-1999 Questionn aire ,Consol. Ct. No. 02-00551 Page 8

at 118. During the 1998-1999 review, VI L initially reported only its sales of bright bar to the United States. Stainless S teel Bar f rom India ; Prelimi

nary Res ults of Antid

umping Du ty Administra tive Review and New Shipper R eview an d Partial Re cession o f Administr

ative Re view, 65 Fed. R eg. 122 09, at 122 10-11 (Ma r. 8, 2000 ). Upon Co mmerce’ s reques t to update its database, VIL

reported that its affiliate VAL also had home market sales of stainless steel bar, which were sales of black bar, during the period of review. Def. Response Mem. , at 7 (citing 65 Fed. Reg. at 12210-11.) The narr ative description of this information was submitted after an administrative deadline and was therefore re jected by Commerc e. See 65 Fed. Reg. at 12210. As a result, Commerce found that all the information submitted by VIL was incomplete and preliminarily decide d to apply adverse facts available assigning a ma rgin of 21.02 to VIL

. Id. Ult im ate ly, h owe ver , C om mer ce r evi sed it s de cis io n an d ap pl ied “pa rti al f act s” s ubm it ted by VIL to calculate VIL ’s margin. See Stainless Steel Bar from India; Final Results of Antidumping Duty Administrative Review and New Shipper Review and Partial Rescission of Administrative Review, 65 Fed. Reg. 48965, 48966-67 (Aug. 10, 2000) (calculating normal value based on the company ’s sales t

o a third c ountry

market a s facts a

vailable ); see also Issues and Decision Memoran dum for the

Administra tive Review and New Shipper R eview of t

he Antidum

ping Duty Order on Stainless Steel Bar from India February 1, 1998 through January 31, 1999 , cmt. 4 (explaining that VIL ’s “responses are sufficiently complete to serve as a reliable basis for reachi ng a determinat

ion without

creatin g undue difficul ties” an d decidin g to use f acts othe rwise available only “

with respect to choosing the appropriate compar ison market as a basis for normal value and when determining margins for U.S. sales that do not have identical matches.”).Consol. Ct. No. 02-00551 Page 9

II. The Current Administrative Review In light of the Carpente

r decision , the cour

t’s inquir y is whether Commerce ’s decis ion to collapse the Vira j Group c ompanies , VAL , VIL and VFL for the PO R from Fe

bruary 1, 2000 to January 31, 2001, is consistent with its previous determinations, in which Commerce did not collapse the same companies involving the entry of the same subject merchandise. Consistency is a corner

stone of administrative action. See, e.g., Skidmore v. Swift & Co. , 323 U.S. 134, 140, 65 S. Ct. 161, 89 L. Ed. 124 (1944) (The level of defe rence afforded an agency ’s action “will depend upon . . . its consistency with earlier and later pronouncements.”) The Court

has rec ognized t

he “impor

tance of consiste ncy across [a ntidumping ] reviews

[as] inferred from the rationale outlined in the promulgating regulations pursuant to the Uruguay Round Agreements Act.” See Hynix Semiconductors, Inc. v. United States , 27 CIT __, __, 2 48 F. Supp. 2d 129 7, 1304 (2 003). Comme rce may reach d iffere nt deter minations i

n separa te administrative reviews, but it must either employ the sa me methodology or

give reasons for changing its practice. Cinsa, S.A. de C.V. v. United States , 21 CIT 341, 349, 966 F. Supp. 1230, 1238 (1997) (involving a challenge to Commerce ’s method of calculation of cost of production and constructed value). “I t is ‘a general rule that an ag ency must either c onform itself to its prior decisions or explain the reasons for its departure . . . .’” Hussey Cooper, Ltd. v. United States , 17 CIT 993, 997, 834 F. Supp. 413, 418 (1993) (citations omitted). When Commerce depa rts from its prior d ecision, it must prov

ide a re asoned explanation for its de parture in order for the c ourt to judge the consistency

of the administrative action. Id. at 998, 83 4 F. Supp. at 419; see RHP Bearings Ltd. v. United States , 24 CIT 1218, 120 F. Supp. 2d 1116, 1124 (2000) aff’d in part and vacated in part , 288 F. 3d 1334, 1337 (Fed. Cir. 2002) (vacating the CIT decision sustainingConsol. Ct. No. 02-00551 Page 10

7 These ba r production fac ilities ar

e the pro duction f

acilitie s that Comme

rce fou nd to overlap with VIL

and VFL’s production operations “because they are related to bar production and not billet making.” Remand Results II , at 18. Commerce’s calculation of the profit component of constructe d value and remanding the case f or further proceedings) (“ Commerce is under an obligation to explain the apparent inconsistency of its approach in [the present] review and the two preceding reviews.”) The period of review at issue in this action is not the first instance where Commerc e had the information to consider the applicability of the collapsing regulation to the Viraj Group’ s stainless steel bar production. Commerce claims that VI L was only

reviewed once before the review at issue in this case and that collapsing the Viraj Gr oup companies was not an issue previously. Def.’s Response Mem. , at 7. Notably, Commerce claims that during the 2000-2001 review, it establi shed for

the first time that: (1) VAL possessed production facilities to produce stainless steel bar (black bar) that was sold in the home market during the period of review ; (2) VIL possessed production facilities to produce bright bar that was sold in the United States market during the period of review; and ( 3) VFL had produc tion facilities that were sim ilar to VI L’s production facilit

ies that c ould be use d to produc e stainle ss steel bar, but VFL itself did not produce stainless steel bar during the period of review.

Id. at 8

. This conte

ntion is misle ading. In its Final Dete rmination, Remand R esults I , and Remand Results II

, Commerce focused on the following facts as f orming the basis of its decision to collapse: (1) VAL has produc tion facilities for making steel billets and black bar 7 ; (2) VIL has the capabilities to further process the black bar into brig ht bar (cold-finished bar), but VI L cannot produce black bar on its own; (3) VFL ’s primary produc tion operation relates to producing stainless steel flanges, and VFL ’s production facilities are similar to those of VI L, but not VAL

.Consol. Ct. No. 02-00551 Page 11

See e.g., Remand Results II , at 12-13. The same principal facts could be gleaned from the information supplied by VI L in the previous two administrative reviews. See infra Par t I, History of Viraj’s P

articipati on in the Ad

ministrativ

e Revie ws. Thus, Commerce had the same principal information during the previous administrative reviews that established that the produc tion facilities of each Viraj Group company possessed the capability to produc e stainless steel bar. The addi tional fin dings ide ntified by Commerce

in the 2000 -2001 re

view are that VAL

sold black bar in the home market and that VFL had production facilities that were similar to VI L’s producti on facil ities that

could be u sed to pro duce sta inless ste el bar. Commerce d id not expla

in how these additional findings were material or de cisive in establishing a sufficient basis for collapsing that did not exist during the previous administrative reviews. Further more, as argue d by

Plaintiff s, Commerc e made a

n affirmative de cision not to collapse VAL, VI

L, and VFL

during the first shipper review and the 1998-1999 re view. Pls. Reply , at 5-6. Thus, Commerce’s acceptance of the cost of production data for the subject merchandise based on the price VAL charged VI

L for hot-rolled stainless steel bar r eveals the age ncy’ s de cis io n t o t rea t VA L and VIL as sep ara te e nt it ies and to acc ept th e pr ice s pa id by VIL to VAL for raw mate

rials as an accurate repre sentation of costs incurred in producing the subject merchandise. See, e. g., New Ship per Ques tionnaire , at 29. In other words, Commerce ’s treatment of VAL as a

supplier of raw materials independent of VI L indicated that Commerce at that time affirmatively c

hose not to collapse VAL and VI L. Aside from a more developed record of its factual findings, Commerce did not present evidence of material factual cha nges relevant to the collapsing issue since the 1998-1999 review. Whereas the principal facts have remaine d the same since the previous two administrativeConsol. Ct. No. 02-00551 Page 12

reviews, Commerce’s analy sis of the Viraj Group companies in the 2000-2001 review differ ed from its previous determinations. When the Department collapsed the companies in the 2000- 2001 r eview , it d eparte d from its p revio us app licat ion o f the an tidu mpin g regulat ions . Alt hough Commerce provided some explanation for its different determination, it is not adequate to support the imposition of an inconsistent result in this case. Commerce argues that the curr ent review differs from the 1998-1999 review in that Commerce consider ed the issue of collapsing the Viraj Group companies from the beginning of this re view since VIL

reported sales information for the entire Viraj Group. Def. Response Mem. , at 8. Commerce buttresses its argument pinpointing that in the 1998-199 9 review

Commerce

applied only

partial f acts ava ilable to V

iraj’s ma rgin calculation because VI

L failed to timely

submit the narrative description of the home market sales of black bar sold by

VAL during that per

iod of review. Id. at 7. Comme rce, however, f

ailed to explain how VIL ’s reporting of sales information for the entire Viraj Group was necessary for Commerce ’s consid

eration of colla psing in t he curr ent revi ew. L ikewise, Commerce failed to explain how the lack of a narrative description reg arding the home market sales of black ba r precluded consideration of the collapsing issue. Without an adequate explanation, Commerce cannot reverse its prior practice. See, e.g., Cinsa, S.A. de C.V. , 21 CIT at 349. Therefore , Commerce’s departure from its prior decision not to collapse VAL , VIL and VFL is not warranted in this case. It sho uld be note d that this c ase is dist inguisha ble from Carpente

r because the Carpenter decision was informed by the Court’s previous holding affirming Commerce’s de termination not to collapse the Viraj Group companies in an earlier pe riod of review. This distinction, however, does not vitiate the essential basis for the court’s decision in this case: that Commerce may notConsol. Ct. No. 02-00551 Page 13

8 In other words, Commerce e xplains that it is sufficient to determine whether VAL can produce bright bar without substantial retooling, but not necessa ry to also determine tha

t VIL can produce stainless steel black bars. Remand Results II. In Slater II, the court instructed Commerce to explain why it need not examine the production fa cilities of each company involved in collapsing and why it need not address the possibility of shifting pr oduction among companies in either direction. Slip Op. 04-22, at 11. depart f rom its pri or practice without a cha nge in ma terial f acts or a reasone d explanat

ion for its departure. Cf. Carpenter , Slip. Op. 04-103, at 9. While there is no preceding CI T decision involving the collapsing issue in the 1998-1999 review, the rec ord provides sufficient information to distill the

principa l facts that informed Commer ce’s de cision not

to collap se the companies in the previous administrative reviews. This conc lusion obvi ates the need to a ddress the merits o f Commerc e’s Remand R esults II , especially since

they do not bring to lig

ht significant facts or findings establishing a basis for a change in Commerce’s approac h in this case. It should be noted, however, tha t the government’s latest explanation of its methodology further supports the above conclusion. Collapsing involves treating a group of af

filiated producers as a single entity for the calculation of dumping margins

. See 19 U.S.C. § 1677(33) (2004). In pertinent part, the collapsing regulation requires Commerce to determine that the companies “have production fac ilities for similar or identical products that would not require substantial retooling of either facility in order to restructure manufacturing priorities,” and that “there is a significant potential for the manipulation of price or production.” 19 C.F.R. § 351.401(f)(1). Essentially , Commerce interprets the substantial retooling prong of this regulation as merely

requiring a unilateral analy sis of a potential shift in manufacturing priorities 8 as long as there is a certain over lap in the production of similar or identicalConsol. Ct. No. 02-00551 Page 14

9 The court also notes inconsistency in Commerce’s interpretation and application of 19 C.F.R. § 351.401(f)(1). While Commerce contends that the unilateral analy sis of the substantial retooling prong is a reasonable inter pretation of its regulation, in another stainless steel bar ca se, for example, involving the German companies EWK and KEP, Commerce noted the c ompanies had production facilities that could produce similar and identical mercha ndise in a certain limited range of sizes without requiring substantial retooling. Final Determination of Sales at Less Than Fair Value: Stainless Steel Bar from Germany , 67 Fed. Reg. 3159 (Jan. 23, 2002). I n addition, Commerce took into account that either of the two companies could outsource a portion of the production process to the other company for some sizes outside that limited range. Id. Nonetheless, Commerce concluded that the limited overlap of the compa nies’ production capabil ities for

identica l product s and “the

signific ant imped

iments to expanding

this over lap, in concert with . . . the lack of any significant intertwining of the operations of the two firms,” were insufficient reasons to collapse the companies. Id. This reasoning deviates from the Department’s interpretation that “its regulation does not re quire that each affiliated company produce the products that the other company produces before finding the potential for manipulation of shifting production priorities.” Remand Results II , at 15. mercha ndise by the compa

nies. 9 Remand Results II , at 10-13. Thus, Commerce argues that the Viraj Group companies have production facilities for produc tion of stainless steel bar, and that there i s an ov erlap i n thei r prod uctio n of st ainle ss st eel bar as the ir pro ducti on faci liti es “con verge with respect to the [stainless steel bar].” See Remand Results II , at 10-11. Commerce, however, does not provide an explanation regarding its method of dete rmining the sufficiency

of such an overlap in the production of similar or identical merchandise, and it does not appe ar from the record that a greater

overlap sprang into existence in the 2000-2001 review since the first shipper review a nd the 199 8-1999 re

view. The

court not es that the

gover nment had

an oppor tunity to demonstrate any

factual changes in the production over lap from the prior administrative review, and that the government instead insisted that the 2000-2001 review wa s the first instance where Commerce

had enou gh infor mation to ma

ke its dec ision to co llapse the companie s.Consol. Ct. No. 02-00551 Page 15 C ONCLUSI ON Commerce

cannot, w

ithout an a

dequate explanation or a mat

erial change in

facts, im pose an inc onsi stent resul t. Co mmerc e has n eithe r demo nstra ted ho w certa in add itio nal fi ndin gs during the 2000-2001 review were ma terial or decisive to its determination to collapse nor fur ni she d ad equ ate ex pl ana ti on f or d epa rti ng f

rom it s pr evi ous dec is io n no t t o co ll aps e VA L, VIL and VFL to warr

ant its decision to collapse the Viraj Group companies in the 2000-2001 review. In this case, Commerce’s r eversal of its prior practice is inconsistent with core administrative law principle s. Consequ

ently , Plaintiff

s’ motion f

or judgment must be

grante d, and this

matter is remanded to Commerce for calculation and imposition of individual antidumping margins upon VAL, VI L and VFL . However, the court notes that Plaintiffs in this case have not objected to the potential collapse of VIL

and VFL, “as the se companies have similar functions for finishing VAL inputs.” Pls. Reply , at 9 n.4. Therefore, on remand, Commerce ma y consider c ollapsing VIL and VFL in accor

dance with the court’s opinions in Slater I and Slater II.

February

17, 2005 /s/ Judith M. Barzilay Dated : _______________________

_________________________ New York, New York Judith M. Barzilay