Verified d factor controls annual capacity; sale deed description alone cannot sustain differential duty demand.

Annual capacity under the Hot Re-Rolling Steel Mills Annual Capacity Determination Rules, 1997 had to be fixed on the basis of the assessee's declared parameters as verified by the Commissioner, including the 'd' factor. The 'd' factor is the nominal centre distance of the pinions and required verification through actual inspection by Central Excise officers; it was not to be taken mechanically from the sale deed description. Because the verified declaration had already been accepted for fixation of annual capacity, a differential duty demand and consequential penalty based solely on the sale deed figure was unsustainable.

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Issues: Whether the demand for differential duty and consequential penalty could be sustained by treating the figure in the sale deed as the correct "d" factor for determination of annual capacity under the Hot Re-Rolling Steel Mills Annual Capacity Determination Rules, 1997.

Analysis: Rule 3 required the assessee to declare the relevant parameters, including the "d" factor, and required the Commissioner to verify the correctness of the declaration before determining annual capacity. The "d" factor represents the nominal centre distance of the pinions and is a matter for verification on the basis of actual inspection by the Central Excise officers. The rule did not mandate adoption of the description appearing in the sale deed, and the verified declaration had already been accepted and used for fixation of annual capacity.

Conclusion: The demand based solely on the sale deed description was unsustainable and the assessee succeeded on the issue.

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