Installed furnace capacity governs annual capacity determination; actual usable output cannot override the invoice basis under the Rules.

Annual furnace capacity under the Induction Furnace Annual Capacity Determination Rules, 1997 is to be fixed from the total installed capacity shown in the manufacturer's or trader's invoice. A claim that thicker insulation reduced the furnace's effective usable capacity after installation was held irrelevant, because the Rules do not permit assessment on actual production capability. On that basis, the furnace capacity was correctly taken at 3.5 MT from the invoice, and the assessee's challenge failed.

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Issues: Whether the annual capacity of the induction furnace had to be determined on the basis of the manufacturer's invoice showing 3.5 MT, or on the assessee's claim of reduced usable capacity after installation.

Analysis: Rule 3(1) of the Induction Furnace Annual Capacity Determination Rules, 1997 requires annual capacity to be determined from the total capacity of the furnace installed in the factory on the basis of the manufacturer's or trader's invoice. The invoice admittedly showed a furnace capacity of 3.5 MT. The assessee's plea that thicker insulation reduced the effective production capacity after installation was held to be irrelevant because the Rules do not provide for determination on the basis of actual usable or effective production capacity.

Conclusion: The annual capacity was correctly fixed at 3.5 MT on the basis of the manufacturer's invoice, and the assessee's challenge failed.

Final Conclusion: The determination of furnace capacity under the Rules was upheld and the appeal was rejected.

Ratio Decidendi: Where the governing rules prescribe determination of annual capacity from the installed furnace capacity as shown in the manufacturer's or trader's invoice, actual usable production capacity after installation cannot displace that statutory basis.

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