Annual capacity under rerolling mill rules turns on the statutory formula, not unchanged actual production after parameter reduction.

The Hot Rerolling Steel Mills Annual Capacity Determination Rules, 1997 required annual capacity to be determined on the statutory formula, and a revised value of parameter 'd' had to be given effect. The relevant factor was the centre distance of the pinion in the pinion stand, so redetermination could not be refused merely because the mill's actual production remained substantially unchanged. The inquiry was confined to the formula prescribed by the Rules, not to post-change output, and reduction in parameter 'd' therefore entitled the assessee to redetermination of annual capacity.

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Issues: Whether, for determining the annual capacity of production of rerolling mills under the Hot Rerolling Steel Mills Annual Capacity Determination Rules, 1997, the value of parameter 'd' was the determinative factor and whether a reduction in that value required redetermination of the annual capacity notwithstanding that actual production might remain the same.

Analysis: The Rules expressly permitted a change in parameter 'd' and provided for redetermination of annual capacity on the revised value. The relevant factor under the formula was the centre distance of the pinion in the pinion stand, and the Commissioner could not deny redetermination on the ground that the physical production of the mill was unaffected. The inquiry under the Rules was confined to the statutory formula, not to the actual production achieved after the change.

Conclusion: The reduction in parameter 'd' had to be given effect for capacity determination, and redetermination of annual capacity could not be refused on the basis that actual production remained substantially unchanged. The issue was decided in favour of the assessee.

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