Capacity determination under furnace classification rules requires proper expert proof before liability can be fixed.

Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 could not be applied unless the factual basis for treating the furnace as pusher type was properly established. The Tribunal found that the department had not satisfactorily displaced the appellants' expert evidence and had not adequately tested the technical material before fastening liability. Because the classification issue was unresolved on the available evidence, the impugned orders were set aside and the matter was remanded for de novo consideration with fresh expert examination and an opportunity for the appellants to respond.

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Issues: Whether the annual capacity of production could be fixed under Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997, and whether the classification of the furnace as pusher type or batch type was justified on the material and expert evidence available.

Analysis: The capacity had been determined on the basis of the declarations and technical verification, but the dispute centred on the correct nature of the furnace and the consequent applicability of Rule 5. The Tribunal noted that Rule 5 could not be applied where the factual foundation for treating the furnace as pusher type was not satisfactorily established. It also found that the appellant's expert opinions had not been properly tested or displaced, and that the department had to establish the furnace as pusher type before fastening liability. In these circumstances, the order suffered from misapplication of mind and inadequate examination of the expert material.

Conclusion: The impugned orders were set aside and the matter was remanded for de novo consideration, with a direction to obtain fresh expert examination of the furnace and to afford the appellants an opportunity to meet that opinion.

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