High speed mill classification requires supporting material, and an unsupported annual capacity demand cannot stand.

A re-rolling mill could not be classified as a high speed mill for annual capacity fixation under the compounded levy scheme because the verification report and the impugned order did not record supporting material showing the speed of operation required by the notification. The earlier remand required proper consideration of relevant facts, but no fresh verification or factual basis was produced. The higher annual capacity and resulting duty demand were therefore unsustainable, and duty liability had to be worked out on the basis applicable to a low speed mill.

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Issues: Whether the appellant's re-rolling mill was correctly treated as a high speed mill for fixing annual capacity of production and consequent duty liability under the compounded levy scheme.

Analysis: The method for determining annual capacity under Notification No. 32/97-C.E. (N.T.) distinguished between high speed mills and low speed mills by reference to the speed of operation. The appellant consistently claimed that its mill was low speed. The verification report dated 28-3-2000, on which the Commissioner relied, did not record any material showing that the mill was a high speed mill. The impugned order nevertheless repeated the earlier conclusion without fresh verification or supporting factual basis, despite the matter having earlier been remanded for proper consideration of relevant facts.

Conclusion: The finding that the mill was a high speed mill was unsustainable. The higher annual capacity and duty demand were set aside, and the appellant succeeded.

Final Conclusion: The duty liability must be determined on the basis applicable to a low speed mill, and the impugned adjudication could not be sustained for want of supporting material.

Ratio Decidendi: A higher duty demand based on classification of a mill as high speed cannot be sustained unless the classification is supported by relevant material showing the speed of operation required by the governing notification.

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