Rule 5 governs annual capacity after machinery changes, and a belated vires challenge cannot be raised on appeal.

Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 applies when a manufacturer intimates any change in installed machinery under Rule 4(2), because that position had already been settled by earlier binding authority. The Court therefore treated Rule 5 as governing annual capacity determination in such cases and rejected the assessee's contrary contention. A constitutional challenge to the vires of Rule 5 was also not entertained at the appellate stage because it had not been raised before the Tribunal or the High Court in the present proceedings. The impugned judgments were set aside on the basis of the settled interpretation.

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Issues: (i) Whether Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 applies when a manufacturer proposes to make a change in the installed machinery under Rule 4(2) of those Rules; (ii) Whether a challenge to the vires of Rule 5 could be raised at the appellate stage when it had not been urged before the Tribunal or the High Court.

Issue (i): Whether Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 applies when a manufacturer proposes to make a change in the installed machinery under Rule 4(2) of those Rules.

Analysis: The issue was treated as already settled by the Court in an earlier decision, which held that when any change in the installed machinery or any part thereof is intimated to the Commissioner under Rule 4(2), Rule 5 becomes applicable for determining the annual capacity of production of the factory.

Conclusion: Rule 5 applies in such a case, and the answer is against the assessee.

Issue (ii): Whether a challenge to the vires of Rule 5 could be raised at the appellate stage when it had not been urged before the Tribunal or the High Court.

Analysis: The assessees sought adjournment on the basis that a vires challenge to Rule 5 was pending before the High Court, but the Court declined to entertain that contention because the challenge had not been raised before the Tribunal or the High Court in the present proceedings.

Conclusion: The vires challenge could not be raised at that stage, and the objection was rejected.

Final Conclusion: The appeals succeeded on the basis of the earlier binding decision and the belated constitutional challenge was not entertained, resulting in setting aside of the impugned judgments.

Ratio Decidendi: Where a later challenge was not raised before the fact-finding and first appellate forums, and an earlier decision has already settled the legal position, Rule 5 governs the determination of annual capacity upon intimated changes in installed machinery under Rule 4(2).

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