Annual capacity determination under the 1997 Rules follows Rule 5 after intimation of machinery changes, with remand for redetermination.

Rule 5 of the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 governs determination of annual capacity where a mill intimates a change in installed machinery, or any part of it, under Rule 4(2). The Supreme Court's construction of the 1997 Rules was treated as binding, so the contrary view taken by the Commissioner could not stand. The annual capacity therefore had to be redetermined under Rule 5, with consequential duty liability worked out on that basis. The impugned order was set aside and the matter remanded for fresh determination in line with the settled legal position.

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Issues: Whether Rule 5 of the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 applies for determination of annual capacity of production where the mill undergoes change in the installed machinery or any part thereof and such change is intimated to the Commissioner under Rule 4(2).

Analysis: The issue stood covered by the Supreme Court decision interpreting the 1997 Rules. On that construction, Rule 5 is attracted when there is an intimation under Rule 4(2) regarding change in the installed machinery or any part thereof, and the annual capacity is to be determined accordingly. The Commissioner had taken a contrary view, which could not survive after the binding clarification of law.

Conclusion: Rule 5 applies in such cases, and the contrary view taken in the impugned order was unsustainable.

Final Conclusion: The matter required redetermination of capacity and consequential duty liability in accordance with the settled legal position, and the appeal succeeded with remand.

Ratio Decidendi: Where a change in installed machinery is intimated under Rule 4(2), Rule 5 governs determination of annual capacity of production under the 1997 Rules.

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