Excise duty on installed machinery depends on actual operability, not mere installation, where only one machine could run at a time.

Excise duty could not be demanded on both installed machines merely because they were fitted in the factory, where electricity capacity showed only one machine could operate at a time. The certificate from the electricity supply authority and the original power supply document established inadequate power for simultaneous running, and the Revenue did not dispute that evidence. Fresh evidence produced before the appellate authority was accepted, and the finding that production corresponded only to one working machine was supported. On that basis, duty could not be computed as if both machines were in simultaneous operation, and the demand on the second machine was not sustainable.

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Issues: Whether excise duty could be demanded on two installed machines on the basis of installation alone when the assessee showed that only one machine could operate at a time due to inadequate power supply, and whether the appellate authority was justified in relying on fresh evidence produced before it.

Analysis: The certificate from the electricity supply authority and the original power supply document established that the factory had power capacity sufficient for only one machine to function at a time and that both machines could not run simultaneously. The Revenue did not challenge this evidence. The appellate authority was entitled to accept the fresh evidence, and on that basis the finding that production corresponded only to one working machine was supported. In these circumstances, duty could not be computed as though both installed machines were simultaneously in operation.

Conclusion: The demand on the second machine was not sustainable. The order in favour of the assessee was upheld and the Revenue's appeals were rejected.

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