Redetermination of installed capacity cannot be denied where the assessee applied in advance and departmental delay stalled approval.

A time-bound procedure for redetermination of installed annual capacity requires prior intimation and written approval, but departmental delay in processing a duly filed application cannot be treated as an absolute bar where the assessee has invoked the procedure in advance and followed up repeatedly. The note states that, on these facts, the assessee had not committed a lapse justifying denial of revised capacity, and the earlier capacity could not continue to govern the demand merely because approval was not communicated before the change was implemented.

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Issues: Whether the assessee's request for redetermination of annual capacity could be rejected merely because written approval was not obtained before changing the installed parameters, despite the application having been made in advance and the department having delayed its response.

Analysis: Rule 4(2) required prior intimation of the proposed change and written approval before the change, but the assessee had applied for redetermination, followed up repeatedly, and the departmental officers had not acted within a reasonable time. The trade notice prescribed a time-bound procedure for processing such requests and indicated that delay at the departmental level should not prejudice an assessee who had complied with the process. On the facts, the assessee had not committed any lapse warranting denial of relief, and the departmental inaction could not be used to sustain the demand based on the earlier capacity.

Conclusion: The rejection of the request for revised capacity was unsustainable and the assessee succeeded on the issue.

Final Conclusion: The order of the Commissioner (Appeals) was set aside and the demand based on the originally determined capacity did not survive.

Ratio Decidendi: Where a statutory procedure for revising installed capacity is time-bound and the assessee has duly invoked it, administrative delay by the department cannot defeat the request by insisting on prior written approval as an absolute bar.

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