Contemporaneous technical records prevail over weak inspection reports in fixing mill production capacity and the applicable d factor.

Contemporaneous manufacturer and assessee records were preferred over a departmental inspection report for fixing the hot re-rolling mill's annual production capacity. The departmental measurement of the "d" factor at 275 mm was treated as unreliable because the report did not explain the measurement method, the technical basis for assessing a pinion inside a closed oil bath chamber, or the qualifications of those assisting the verification, and it also contained an apparent factual inconsistency. Consistent pre-duty documents from 1996 recorded the pinion distance as 10 inches or 254 mm, so the "d" factor was taken as 254 mm and capacity was to be re-determined on that basis in favour of the assessee.

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Issues: Whether the annual capacity of production of the hot re-rolling mill was to be determined by accepting the departmental measurement of the "d" factor at 275 mm or the contemporaneous manufacturer and assessee documents showing the "d" factor at 254 mm.

Analysis: The evidentiary worth of the departmental inspection reports was found weak because they did not disclose the method of measurement, the technical basis for measuring a pinion hidden inside a closed oil bath chamber, or the qualification of the persons who assisted in the verification. The report also contained an apparent factual inconsistency regarding the number of pinions in the mill. By contrast, the offer, order, invoice, declaration, and related correspondence prepared in 1996 consistently recorded the pinion distance as 10 inches or 254 mm. Those documents were contemporaneous, predated the capacity-based duty scheme, and therefore did not carry the suspicion of self-serving alteration. On this material, the assessee's documents were preferred over the departmental report.

Conclusion: The "d" factor had to be taken as 254 mm, and the annual capacity of production was to be re-determined on that basis, in favour of the assessee.

Final Conclusion: The dispute on capacity fixation was resolved by accepting the assessee's contemporaneous technical records over the departmental verification, with consequential adoption of the lower "d" factor for reassessment.

Ratio Decidendi: Where the departmental technical report is unconvincing or methodologically unsupported, contemporaneous and consistent documentary evidence may be preferred for fixing production capacity.

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