Annual capacity of induction furnaces must reflect actual installed capacity, not only the original declared figure.

Annual capacity of an induction furnace is not confined to the originally declared or first installed figure; the rules contemplate redetermination where capacity is later increased or reduced. On that construction, the relevant capacity is the actual installed capacity for the period in question, and not merely the capacity shown in the manufacturer's invoice or initial declaration. A contrary reading would render the capacity-adjustment rule ineffective. The Commissioner's approach was therefore incorrect, and the capacity had to be reconsidered on remand in light of the furnace's actual capacity.

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Issues: Whether the annual capacity of an induction furnace could be redetermined on the basis of its actual capacity after installation and subsequent change, and whether the Commissioner was right in treating only the originally declared or initially installed capacity as determinative.

Analysis: The rules governing annual capacity determination do not confine capacity to the original manufacturing capacity of the furnace at the time of its first installation. The scheme of the rules, including Rule 4, contemplates determination of the capacity where the manufacturer proposes to increase or reduce the capacity of the induction furnace. In that context, the relevant installed capacity is the capacity as it exists for the period in question, and not merely the capacity originally declared on the basis of the manufacturer's invoice. A construction that ignores later reduction or increase in actual capacity would make Rule 4 ineffective.

Conclusion: The Commissioner's view was incorrect. The actual capacity of the furnace had to be determined in accordance with the rules, and the matter was required to be reconsidered on remand in favour of the appellant.

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