Production capacity reassessment may rely on existing evidence when the assessee's machine is unavailable for a meaningful trial run.

Where a remand required redetermination of the production capacity of a specific machine under Rule 173E, the authority was justified in declining a surrogate trial run on other machines when the assessee's own machine was junked and unavailable for test production. A test on different machines would not reliably reflect the relevant capacity and would fall outside the remand directions. The adjudicating authority could therefore rely on the existing record, including private documents and other evidence, to determine any unrecorded production. On that basis, the demand was sustained and the challenge failed.

---

---

Issues: Whether, in de novo adjudication following remand, the adjudicating authority was justified in declining a trial run on similar machines at other premises and in deciding the demand on the basis of the evidence available on record when the assessee's own machine was unavailable for test production.

Analysis: The remand required redetermination of the production capacity of the assessee's own machine under Rule 173E of the Central Excise Rules, 1944, and thereafter determination of any unrecorded production on the basis of evidence. The assessee could not produce the machine, which was found to be junked and out of working condition. In those circumstances, a trial run on machines installed elsewhere would not reflect the production capacity of the assessee's machine during the relevant period. The adjudicating authority was therefore justified in holding that such an exercise would be futile and beyond the remit of the remand directions, and in proceeding on the existing records, including private documents and other evidence.

Conclusion: The refusal to conduct test production on other machines was upheld, and the demand was sustained on the evidence on record.

Final Conclusion: The appeals failed, and the impugned order confirming the demand was affirmed.

Ratio Decidendi: Where redetermination of production capacity is ordered in respect of a particular machine and that machine is unavailable for trial run, the authority may decide the matter on the available evidence instead of undertaking a surrogate test on other machines that would not reliably represent the assessee's capacity.

---