Technical verification is essential in statutory capacity inations; reliance on declarations alone is insufficient without proper enquiry.

Statutory capacity determination based on a technical factual parameter requires the competent authority to verify the declaration independently and with proper technical assistance. A mere reliance on the assessee's declaration or an untested subordinate report is insufficient where furnace type affects the calculation of utilised hours and annual capacity. The enquiry must also give the assessee an opportunity to participate, and the record should show that the statutory determination was made by the competent authority itself. Where these safeguards are absent, the capacity determination order is liable to be set aside and the matter remitted for fresh determination.

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Issues: Whether the orders determining annual capacity of hot re-rolling steel mills were sustainable when the type of furnace had not been verified by qualified technical personnel and the assessees were not associated with the enquiry.

Analysis: Rule 3 required the assessee to file a declaration and cast a corresponding duty on the Commissioner to verify its correctness and ascertain the true value of the relevant parameters. The Commissioner could not act merely on the declaration or on an untested verification report, particularly where the furnace type was a technical fact affecting the utilised hours and, in turn, the capacity determination. The Board's circular and the proviso to Rule 4 also contemplated examination with the aid of technical authorities, and the record did not show that such consultation or proper verification had been undertaken. The orders were further doubtful because the notings suggested preparation and checking by subordinate staff, raising concern whether the statutory determination was in fact made by the Commissioner as required.

Conclusion: The capacity determination orders were unsustainable and were set aside. The matters were remanded to the jurisdictional Commissioner for fresh determination of the furnace type by fully qualified technical personnel or body, with opportunity to the assessees to ate in the enquiry, and for passing of fresh orders under the Rules.

Ratio Decidendi: Where a statutory capacity determination depends on a technical factual parameter, the competent authority must independently verify that fact with proper technical assistance and cannot rely merely on the assessee's declaration or an unsubstantiated subordinate report.

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