Annual capacity redetermination attracts Rule 5 under the hot re-rolling steel mills excise scheme.

Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 applies whenever annual capacity is determined or redetermined under the Rule 3(3) formula, including redetermination made after a change in installed machinery under Rule 4(2). The statutory scheme under section 3A of the Central Excise Act, 1944 fixes duty by reference to annual capacity, and the clear language of Rule 5 leaves no separate exception for machinery-based redetermination. On that plain reading, the deeming provision attached to the capacity determination operates fully, and the assessees' challenge fails.

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Issues: (i) Whether Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 applies when the installed machinery or other relevant parameters are changed and the annual capacity is redetermined under Rule 4(2).

Issue (i): Whether Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 applies when the installed machinery or other relevant parameters are changed and the annual capacity is redetermined under Rule 4(2).

Analysis: Section 3A of the Central Excise Act, 1944 authorises levy on the basis of annual capacity of production, and the 1997 Rules prescribe the manner of determination through Rule 3(3). Where a manufacturer intimates changes in installed machinery under Rule 4(2), the capacity must still be redetermined under the same formula in Rule 3(3). Rule 5, by its clear language, comes into operation whenever annual capacity is determined or redetermined under Rule 3(3), and there is no separate mechanism excluding its operation merely because the redetermination follows a change in machinery. The rule must therefore be given full effect in a taxing statute according to its plain words.

Conclusion: Rule 5 applies even when capacity is redetermined under Rule 4(2), and the assessees' challenge fails.

Final Conclusion: The impugned orders were unsustainable and the Commissioners' orders restoring duty liability on the basis of Rule 5 were upheld.

Ratio Decidendi: In a fiscal scheme where capacity is determined or redetermined under a prescribed formula, every redetermination made under that formula attracts the deeming provision attached to it if the statutory language is clear and unqualified.

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