Duty on installed machinery must follow actual simultaneous working capacity, not mere machine count, where power constraints are proven.

Duty on installed machinery cannot be computed mechanically by counting the number of machines where credible, unchallenged evidence shows that power constraints prevent simultaneous operation. The assessee produced electricity-supply evidence establishing that only one machine could run at a time, and the appellate authority accepted that fresh material. On that factual basis, liability was assessed by actual working capacity rather than nominal installation, so duty on the second machine was unjustified. Interest and penalties based on the same demand were also unsustainable, and the relief granted to the assessee was maintained.

---

---

Issues: Whether duty on the installed machines was payable on the basis of the number of machines installed, or whether liability had to be determined with reference to actual simultaneous working and production capacity.

Analysis: The assessee produced a certificate from the electricity supplier showing that the available power supply could support only one machine at a time and could not support simultaneous operation of both machines. The appellate authority accepted this fresh evidence, and the Revenue did not challenge its authenticity. On that factual foundation, the finding was that although two machines had been installed, only one could function at a time and production corresponded only to one machine. In those circumstances, computation of duty on the basis of two machines was held to be unjustified, and the related interest and penalties were also unsustainable.

Conclusion: The duty demand on the second machine was not justified, and the assessee's position was upheld.

Final Conclusion: The Revenue's challenge failed, and the order granting relief to the assessee was sustained.

Ratio Decidendi: Where credible and unchallenged evidence shows that installed machinery cannot be operated simultaneously because of power constraints, duty liability cannot be mechanically computed as if all machines were capable of concurrent use.

---