Invoice-based capacity ination under compounded levy upheld; later-year opt-out request remanded for fresh consideration.

Under the compounded levy framework, furnace capacity had to be fixed on the basis of the supplier's authenticated invoice where the governing rule so required, and the authority could not replace that method with physical measurement or private technical opinion. The capacity determination at 3.5 MT was therefore sustained. A request to opt out of the scheme for the subsequent financial year was treated separately, because the option under the scheme applies year by year; the matter was remanded for fresh reconsideration of that later-year request.

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Issues: (i) Whether the annual production capacity of the induction furnace unit was to be determined on the basis of the supplier's invoice under the compounded levy framework; (ii) Whether the appellant could be permitted to opt out of the compounded levy scheme for the subsequent financial year.

Issue (i): Whether the annual production capacity of the induction furnace unit was to be determined on the basis of the supplier's invoice under the compounded levy framework.

Analysis: The applicable rule required the Commissioner to call for the authenticated invoice of the manufacturer or trader who supplied or installed the furnace or crucible and to ascertain the installed capacity on that basis. The rule did not leave room for reliance on physical measurements or private technical opinions where the invoice particulars were available. The Commissioner therefore acted within the statutory framework in fixing capacity according to the invoice.

Conclusion: The capacity determination at 3.5 MT was upheld, and this issue was decided against the appellant.

Issue (ii): Whether the appellant could be permitted to opt out of the compounded levy scheme for the subsequent financial year.

Analysis: The request to opt out concerned the subsequent year, and the matter required reconsideration in light of the legal position that the option under the scheme is binding only for the relevant year. The appropriate course was to send the matter back to the Commissioner for reconsideration of the request for the later financial year.

Conclusion: The matter was remanded for reconsideration of the appellant's request to opt out for the subsequent financial year, and this issue was decided in favour of the appellant.

Final Conclusion: The determination of production capacity was sustained, while the request to opt out of the compounded levy scheme for the later financial year was left for fresh decision by the Commissioner.

Ratio Decidendi: Where the governing capacity-determination rule mandates fixation on the basis of the supplier's authenticated invoice, the authority cannot substitute other evidence; a subsequent-year request to exit the scheme may require reconsideration independently of the earlier year's option.

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