Substantial question of law must arise from the impugned order before it can be answered in appeal.

A substantial question of law can be answered in appeal only if it arises from the impugned order and was actually decided by the authority under challenge. In this excise matter, the dispute concerned duty determination on annual production capacity under section 3A of the Central Excise Act, 1944 and the Hot-Rolling Mills Annual Capacity Determination Rules, 1997, including the aggregation of installed capacity where more than one rolling mill was present. The Court noted that the question admitted at the appeal stage referred to recovery on actual production, but neither the adjudicating authority nor the Tribunal had decided that issue. The question was therefore declined as outside the scope of the impugned orders.

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Issues: Whether the substantial question of law framed on recovery of duty on the basis of annual production capacity, as opposed to actual production, arose from the impugned order and could be answered.

Analysis: The appeal challenged the determination of capacity for duty purposes under section 3A of the Central Excise Act, 1944 and the Hot Re-Rolling Mills Annual Capacity Determination Rules, 1997. The Tribunal had proceeded on the footing that where more than one rolling mill is installed, the total installed capacity is to be determined by aggregating the capacity of the individual mills, and had rejected the assessee's reliance on the board's clarification and the contention that the second mill was sparingly used. In the present appeal, the Court found that the question framed at the stage of admission concerned recovery on the basis of actual production, but neither the original adjudicating authority nor the Tribunal had decided any such issue.

Conclusion: The framed substantial question of law did not arise from the impugned orders and was declined to be answered.

Final Conclusion: The appeal failed because the only question admitted for consideration was outside the scope of the orders under challenge.

Ratio Decidendi: A substantial question of law cannot be answered in appeal unless it arises from the impugned order and was actually the subject of the decision under challenge.

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