Induction furnace capacity can be determined under Rule 3(2) when no authenticated supplier invoice is available.

Under the Induction Furnace Annual Capacity Determination Rules, 1997, Rule 3(1) applies only where an authenticated copy of the furnace supplier's or installer's invoice is available. Where the assessee's document was not shown to be such an invoice, the Commissioner could not rely on Rule 3(1) and was entitled to determine capacity under Rule 3(2) on the basis of comparable furnaces or other relevant material. The earlier remand did not alter that position, as it was confined to rehearing and redetermination. The furnace capacity determination was therefore upheld.

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Issues: Whether the capacity of the induction furnace had to be determined under Rule 3(1) of the Induction Furnace Annual Capacity Determination Rules, 1997 on the basis of the alleged manufacturer's invoice or whether, in the absence of such evidence, the Commissioner could determine the capacity under Rule 3(2) on the basis of other relevant material.

Analysis: Section 3A of the Central Excise Act, 1944 provides for levy based on the annual capacity of production in specified goods, and the Rules framed thereunder prescribe the manner of determining that capacity. Rule 3(1) applies only where an authenticated copy of the manufacturer's or trader's invoice of the furnace supplier or installer is available. The document relied upon by the assessee was not shown to be the invoice or document of the supplier or installer of the furnace. In those circumstances, Rule 3(1) could not be invoked. The Court held that Rule 3(2) governed the situation and permitted determination on the basis of comparable furnaces or other relevant material. The grievance based on the earlier remand did not displace the conclusion, since the remand was confined to hearing and re-determination, and the present challenge did not establish any legal error in the adopted method.

Conclusion: Rule 3(1) was inapplicable, Rule 3(2) validly applied, and the determination of furnace capacity was upheld against the assessee.

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