Production capacity refixation must follow verified parameters and take effect from actual change, not delayed departmental verification.

Annual production capacity had to be refixed on the basis of the verified parameters recorded in the verification report, and not on an unsubstantiated alternate value; the refixation on 164.5 mm was therefore unsustainable and required reconsideration. Where the assessee had already changed the parameters and intimated the department, the effective date of refixation had to relate back to the date of actual modification, as departmental delay in verification could not prejudice the assessee. The order was set aside and the matter remanded for fresh refixation accordingly.

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Issues: (i) Whether the annual capacity of production could be refixed by adopting a parameter value different from that recorded in the verification report; (ii) Whether the refixed annual capacity should take effect from the date of actual change in the parameters or from the later date of verification by the department.

Issue (i): Whether the annual capacity of production could be refixed by adopting a parameter value different from that recorded in the verification report.

Analysis: The verification report showed the relevant parameter value as 160 mm. No material was available to support adoption of 164.5 mm for recalculating the annual capacity, and the refixation was therefore not founded on the verified record.

Conclusion: The refixation on the basis of 164.5 mm was not sustainable and required reconsideration on the basis of the verification report.

Issue (ii): Whether the refixed annual capacity should take effect from the date of actual change in the parameters or from the later date of verification by the department.

Analysis: The change in parameters had been made earlier and intimated to the department. The delay in verification by the revenue authorities could not prejudice the assessee, and the effective date had to relate back to the date on which the parameters were actually changed.

Conclusion: The refixed annual capacity was required to be made effective from the date of actual change in the parameters.

Final Conclusion: The impugned order was set aside and the matter was remanded for fresh refixation of annual capacity on the basis of the verified parameters, with effect from the date of actual modification carried out by the assessee.

Ratio Decidendi: Refixation of production capacity must be based on the verified factual parameters, and its effective date must relate back to the date of actual change when the assessee has duly intimated the department.

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