Annual furnace capacity may be reduced on full evidence where later reports show deterioration and lower working capacity.

In determining annual capacity under furnace rules, the relevant enquiry is the furnace's working capacity, and all material evidence may be considered. The Tribunal accepted subsequent certificates from the Chartered Engineer and manufacturer, together with the departmental verification report, to support deterioration and reduced output capacity. A restrictive approach limited to the original invoice was rejected because the rules did not confine assessment to installed capacity alone. The reduction of the induction furnace's annual capacity from 5 MT to 4 MT was upheld, and the Revenue's challenge failed because no substantial question of law arose.

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Issues: Whether the annual capacity of an induction furnace could be reduced from 5 MT to 4 MT on the basis of subsequent certificates and verification reports, and whether any substantial question of law arose from the Tribunal's order.

Analysis: The Tribunal had considered the invoice, the subsequent certificates of the Chartered Engineer and the manufacturer, and the departmental verification report supporting deterioration of the furnace. The Rules governed determination of annual capacity of production and not fixation of installed capacity. The Commissioner had declined to consider relevant subsequent material on a narrow reading of the Rules, whereas the Tribunal assessed the entire evidence on record and found the assessee's claim for reduced capacity to be justified.

Conclusion: The reduction of annual capacity to 4 MT was upheld, and no substantial question of law arose.

Final Conclusion: The Revenue's challenge failed and the Tribunal's common order was left undisturbed.

Ratio Decidendi: In proceedings for determination of annual capacity of production under the applicable furnace rules, all relevant evidence bearing on the working capacity of the furnace may be considered, and a restrictive reading confined only to the original invoice is impermissible where subsequent material substantiates deterioration and reduced capacity.

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