Annual capacity for duty stays binding unless redetermination procedure is followed, even after machinery changes reduce production.

Where a unit changed machinery and production fell, duty remained assessable on the last determined annual capacity because the assessee did not follow the prescribed procedure for redetermination. The earlier capacity determination therefore continued to bind for duty purposes, and reduced production by itself could not justify a lower capacity-based levy. On that basis, the duty liability on the last determined annual capacity was sustained and no interference was required.

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Issues: Whether the assessee, after effecting a change in machinery that resulted in reduced production, was entitled to have duty assessed on the reduced annual capacity instead of the previously determined capacity.

Analysis: The governing rule was held to permit reliance on the previously determined annual capacity where the assessee had not followed the prescribed procedure for re-determination. The earlier determination of capacity therefore continued to operate. The reasoning was supported by the view that the rule could not be invoked to secure a reduced capacity-based duty liability merely because production had come down after the initial determination.

Conclusion: The assessee was not entitled to payment of duty on the reduced capacity, and the impugned order required no interference.

Final Conclusion: The appeal failed and the order sustaining duty liability on the last determined annual capacity was left undisturbed.

Ratio Decidendi: Where a unit alters machinery but does not comply with the prescribed procedure for redetermination of capacity, the last determined annual capacity remains binding for duty purposes and cannot be reduced solely on the basis of decreased production.

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