Actual production basis prevails over capacity fixation when statutory duty redetermination rights survive under the parent excise law.

Section 3A(4) of the Central Excise Act, 1944 was treated as preserving an assessee's right to seek redetermination of duty on the basis of actual production, even where the Induction Furnace Annual Capacity (Determination) Rules, 1997 had fixed capacity for assessment. The Tribunal held that a rule cannot curtail the statutory entitlement conferred by the parent Act, and the capacity-based mechanism could not override the statutory safeguard for actual-production assessment. The impugned orders were set aside and the matter was remanded to the jurisdictional Commissioner for fresh determination after hearing the assessee, including the objection that capacity had been wrongly fixed.

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Issues: Whether the duty liability had to be redetermined on the basis of actual production under Section 3A(4) of the Central Excise Act, 1944, notwithstanding capacity fixation under the Induction Furnace Annual Capacity (Determination) Rules, 1997.

Analysis: The Tribunal followed its earlier view that where the statutory provision under Section 3A(4) permits redetermination of duty with reference to actual production, a conflicting rule cannot curtail that right. The assessee's entitlement to seek determination of actual production and consequential redetermination of duty was treated as a statutory safeguard that survived the capacity-based assessment mechanism. The impugned orders were therefore set aside and the matters were sent back to the jurisdictional Commissioner for fresh determination after hearing the appellants, including the objection that the capacity had been wrongly fixed.

Conclusion: The issue was decided in favour of the assessee, and the duty liability was directed to be reconsidered on the basis of actual production.

Ratio Decidendi: Where a rule conflicts with the parent statute, the statute prevails, and an assessee entitled under Section 3A(4) of the Central Excise Act, 1944 may seek redetermination of duty on the basis of actual production.

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