Changed rolling mill parameters require capacity to be fixed under the specific change provision, with a reasonable effective date upheld.

Where a rolling mill's parameters had in fact changed, the provision specifically governing a change in installed machinery or operating parameters controlled fixation of annual production capacity, and the Commissioner's relied-upon notification could not override it; the revised capacity was therefore taken at 1968 m.t. The effective date of the revised capacity was left to the Commissioner after intimation and approval of the change, and the date fixed as 9-9-1998 was held reasonable and not interfered with, leaving the assessee partly successful.

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Issues: (i) Whether the annual production capacity had to be determined under the provision applicable to a change in installed machinery and parameters, or under the notification relied upon by the Commissioner; (ii) whether the effective date of the revised annual production capacity should be 1-9-1998 or 9-9-1998.

Issue (i): Whether the annual production capacity had to be determined under the provision applicable to a change in installed machinery and parameters, or under the notification relied upon by the Commissioner.

Analysis: The admitted position was that the rolling mill parameters had in fact been changed. In such a situation, the provision specifically dealing with a proposed change in installed machinery or in parameters governing capacity was the controlling provision. The notification relied upon by the Commissioner, which was not the governing provision for a case of changed parameters, could not be used to fix the capacity on the facts of the case.

Conclusion: The revised annual production capacity was required to be determined under the provision applicable to change of parameters, and it was 1968 m.t., in favour of the assessee.

Issue (ii): Whether the effective date of the revised annual production capacity should be 1-9-1998 or 9-9-1998.

Analysis: The relevant provision left the date of effectiveness to be determined by the Commissioner after the change was intimated and approved. The intimation of change was sent on 31-8-1998, and the effective date fixed in the order was 9-9-1998. That date was found to be reasonable and no ground was made out to interfere with it.

Conclusion: The effective date of the revised annual production capacity remained 9-9-1998, against the assessee.

Final Conclusion: The appeal succeeded to the extent that the annual production capacity was to be taken as 1968 m.t., but the effective date of that revised capacity was upheld as 9-9-1998, with consequential relief as per law.

Ratio Decidendi: Where the capacity of a rolling mill changes because of altered parameters, the specific provision governing such change must control the fixation of annual production capacity, and the effective date may validly be fixed by the Commissioner within a reasonable time after intimation and approval of the change.

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