Capacity determination under stenter rules excludes gallery length where no functional equipment is attached.

Under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998, a gallery without rails, fan or radiator attached to it does not fall within the expression "any other equipment" in Explanation 1 to Rule 3. The length of such a gallery is therefore excluded from the chamber length used to determine annual production capacity. The interpretation was supported by contemporanea exposito and the later 2000 Rules were treated as not materially changing the position. The Supreme Court's affirmation of the Larger Bench view meant the departmental objection to exclusion of gallery length could not succeed, and the assessee's position prevailed.

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Issues: Whether the length of the galleries was to be included in the length of the chamber while determining the annual capacity of production of an independent textile processor.

Analysis: The issue was governed by the interpretation of the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. A gallery without rails, fan, or radiator attached to it was held not to fall within the expression "any other equipment" in Explanation 1 to Rule 3. The Tribunal relied on the binding view that the later Rules, 2000 did not materially alter the position and that contemporanea exposito could properly be used to resolve any ambiguity in the 1998 Rules. Since the Supreme Court had affirmed the Larger Bench view that galleries of this nature were outside the chamber computation, the departmental objection to exclusion of the gallery length could not succeed.

Conclusion: The gallery length was not includible in the chamber length for determination of annual capacity of production, and the assessee succeeded.

Ratio Decidendi: For capacity determination under the relevant stenter rules, a gallery without functional equipment attached to it is not part of the chamber and cannot be included in the computation of annual production capacity.

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