Provisional annual capacity determination requires notice before finalisation, but the provisional d factor remains operative pending redetermination.

Under the Hot Re-rolling Mills Annual Capacity Determination Rules, annual capacity is fixed by the statutory formula and the d factor materially affects duty liability. Provisional determination may be made pending verification of the declaration, but final determination must follow verification and consideration of relevant facts. A provisional figure based on an inspection report without notice to the assessee could not be sustained as final; the assessee was entitled to be heard before redetermination. However, the provisional determination continued to operate until the final order, and the assessee could not insist on duty being paid on the basis of its own declared d factor in the meantime.

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Issues: Whether the provisional determination of annual capacity under the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 could be sustained without notice to the assessee, and whether the assessee could insist on payment of duty on the basis of its declared d factor pending final determination.

Analysis: The annual capacity of a hot re-rolling mill is determined by the statutory formula under Rule 3(3), and the d factor is a material component affecting the duty liability. Rule 3(4) empowers the Commissioner to make a provisional determination pending verification of the declaration, but final determination must follow after verification and after considering the relevant facts. Since the provisional determination in the present case was made on the basis of an inspection report without notice to the assessee, the assessee was entitled to be heard before the final decision. At the same time, the provisional determination continues to operate until the final order is passed, and there was no basis to permit the assessee to substitute its own d factor for the one provisionally determined.

Conclusion: The assessee succeeded to the extent that the matter had to be redetermined by the Commissioner after notice and consideration of objections, but failed on the request to pay duty on the basis of the assessee's declared d factor pending final determination.

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