Installed capacity of multiple hot re-rolling mills must be aggregated; idle or sparingly used equipment does not reduce capacity.

Rule 4 of the Hot Re-Rolling Mills Annual Capacity Determination Rules, 1997 requires assessment of the total capacity of all hot rolling mills installed in a factory. Where more than one mill is installed, each mill's capacity must be determined separately on its own parameters and then aggregated. A clarification relating to a single mill with roughing and finishing sections in different locations did not apply to separately installed mills. A mill's alleged idle, occasional, or inefficient use does not affect its installed capacity for this purpose, so clubbing both mills was upheld.

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Issues: Whether, for determination of annual capacity of production of a factory having more than one hot re-rolling mill installed, the capacity of both mills was to be aggregated and the alleged idle or sparingly used mill could be ignored.

Analysis: Rule 4 of the Hot Re-Rolling Mills Annual Capacity Determination Rules, 1997 requires determination of the total capacity of the hot rolling mill installed in the factory. The phrase "total capacity of the hot rolling mill installed" indicates that where more than one rolling mill is installed, the capacity of each mill must be determined separately with reference to its own parameters and then added together. The clarification relied upon by the assessee dealt with a different situation, namely, a single mill with roughing and finishing sections in different locations and independent power sources, and did not apply to two separately installed mills. The fact that one mill was claimed to be used only occasionally or inefficiently did not alter the installed capacity for the purpose of the Rules.

Conclusion: The capacity was correctly determined by clubbing the capacities of both installed mills, and the assessee's challenge failed.

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