Annual capacity computation dispute over slit bar inclusion led to remand for fresh determination after hearing.

The dispute concerned whether the slit bar attached to hot-air stenter chambers had to be included when redetermining annual production capacity under the Annual Capacity Determination Rules. The assessee argued that the slit bar was not an equipment and its length could not form part of the chamber measurement, and also contended that its Chartered Accountant's certificate and explanation had not been considered without a proper hearing. Because the objection went to the basis of the capacity computation and had not been examined, the re-determination was set aside and the matter was remanded for fresh determination after granting a reasonable opportunity of hearing.

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Issues: Whether the length of the slit bar attached to the hot-air stenter chambers was required to be included while re-determining the annual capacity of production, and whether the matter required fresh consideration after giving the assessee an opportunity of hearing.

Analysis: The assessee claimed that the slit bar was not an equipment within the meaning of the Annual Capacity Determination Rules and, therefore, its length could not be taken into account for computing the length of the hot-air stenter chambers. The impugned re-determination was challenged also on the ground that the Chartered Accountant's certificate and the assessee's explanation were not considered, and that no proper hearing had been granted before re-determination. Since the objection raised went to the basis of the capacity computation and had not been examined by the adjudicating authority, the matter required reconsideration.

Conclusion: The re-determination was set aside and the case was remanded for fresh determination of annual capacity after granting reasonable opportunity of hearing to the assessee.

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