In this paper, an efficient scheme has been proposed to model, detect and classify the fault. The modeling of fault has been proposed with the fuzzy logic using membership function. Fault detection of the unprecedented changes in system reliability and find the failed component state by classifying the faults is proposed using kalman filter and hybrid neurofuzzy computing techniques respectively. A fault is detected whenever the moving average of the Kalman filter residual exceeds a threshold value. The fault classification has been made effective by implementing a hybrid genetic neuro-fuzzy Inference system (GANFIS). By doing so, the critical information about the presence or absence of a fault is gained in the shortest possible time, with not only confirmation of the findings but also an accurate unfolding-in-time of the finer details of the fault, thus completing the overall fault diagnosis picture of the system under test. The proposed scheme is evaluated extensively on a two-tank process used in industry exemplified by a benchmarked laboratory scale coupled-tank system.