Annual capacity redetermination must follow revised mill parameters; Rule 5 cannot fix capacity by prior-year production.

Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 was held inapplicable where a re-rolling mill's capacity was redetermined after a change in its parameters. The Tribunal followed binding Larger Bench and jurisdictional High Court precedent, which required the annual capacity to be assessed on the basis of the revised parameters actually in force, rather than pegging it to the mill's actual production for the 1996-97 financial year. Applying judicial discipline, the redetermination was to be made accordingly, in favour of the assessee.

---

---

Issues: Whether Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 could be applied while redetermining the annual capacity of a re-rolling mill after a change in its parameters.

Analysis: The Tribunal followed the binding precedent of the Larger Bench and the jurisdictional High Court, which had held that when the parameters of a mill are changed and the capacity is redetermined thereafter, Rule 5 cannot be invoked to peg the annual capacity to the actual production of the financial year 1996-97. The principle of judicial discipline required adherence to those decisions, and the capacity had to be determined on the basis of the revised parameters actually in force.

Conclusion: Rule 5 was held inapplicable in the case of redetermination after change in parameters, and the annual capacity had to be reassessed accordingly, in favour of the assessee.

---