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apportioning expenses to component possession product gross
income, the PCR of Q&A-12 plays a complementary and supportive
role, not an exclusive role.
Furthermore, respondent contends that the example in Q&A-12
is merely illustrative and does not authorize petitioner's
interpretation. Illustrative examples must be interpreted so as
to effectuate the statutory language and purpose, according to
respondent, and Q&A-12 must not be interpreted in a manner which
restricts or conflicts with the statute or with Q&A-1.
Respondent contends that if an example in the regulations is
inconsistent with the text of the regulation, the example must
yield and the regulatory text is given effect.
Petitioner argues that the plain meaning of Q&A-12 does not
unduly restrict the scope of Q&A-1. Q&A-12 complements Q&A-1 by
prescribing the method by which CTI is computed for possession
products sold in component form. Q&A-1 provides rules for
allocating and apportioning U.S. affiliate expenses with respect
to sales of possession products in general; Q&A-12 provides rules
prescribing the manner in which U.S. affiliate expenses are to be
allocated and apportioned with respect to component possession
products.
C. Analysis: Legislative Regulations Generally
First, we must determine the roles that Q&A-1 and Q&A-12
play in the instant case. After determining which provision
plays the primary role, we must then determine, under section
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