IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.170 OF 2008 Dujodwala Products Ltd., ..Petitioners Versus Union of India & Ors. ..Respondents ---- Mr.Vikram Nankani with Mr.P.K.Shetty with Mr.Vipin Jain for the petitioners. Mr.R.B.Raghuwanshi, Addl.Solicitor General with Mr.R.V.Desai, Sr.Counsel, Mr.Afroz Shah, Mrs.Rituja Ambekar and Mr.A.P.Chaturvedi for the respondents. ---- Coram : F.I.Rebello & Coram : F.I.Rebello & Coram : F.I.Rebello & R.S.Mohite,JJ R.S.Mohite,JJ R.S.Mohite,JJ Date : 14.2.2008 PC 1. Rule. Heard forthwith. 2. Having heard parties, it is not necessary to set out the facts in detail. The Settlement Commission by its order at paragraph-14.5 held as under :- " Once the trading concerns have to be treated as related persons then duty on the central excise goods would be based on the price at which the latter sold these goods further (to independent buyers) as this would only reflect the correct "transaction value" of the goods sold by the applicant. The applicant has clearly : 2 : admitted that the price difference for which they have been issuing debit notes cannot be matched with particular clearances to a trading concern" . In other words, the Settlement Commission has accepted the principle that the price to be considered would be based on the goods sold by the related persons. 3. Based on this principle, in respect of show cause notice dated 30.7.2004 the Settlement Commission accepted the amount as worked out by revenue by averaging the price for the particular period. The prices ranged from Rs.95 to Rs.118. The figure arrived at Rs.3,27,44,213.79/- was based on the average price for a particular period . The amount in respect of this show cause notice is not disputed by the petitioners. 4. The grievance of the petitioners however, in their rectification application before the Commission was that in so far as show cause notices dated 8.10.2004, 8.11.2004 and 7.2.2005, the Commission has not worked out the amount based on the average for the month as the show cause notice for that period of demand but has accepted Rs.118/- as contained in the show cause notice which was the : 3 : highest average calculated in respect of show cause notice dated 30.7.2004. In other words the principle of average price was disregarded. It is on this basis that Appellant had sought rectification which has been rejected. 5. The argument now advanced is that once the principle of average price is accepted then in so far as the 3 show cause notices at serial nos.2, 3, & 4 of the order of the Commission are also to be worked out on the average price for that particular period of the show cause notice. 6. Considering the fact that settlement Commission has to decide the application according to law, in our opinion, the computation in respect of show cause notices at serial nos.2, 3, & 4 definetely disclosed error which is apparent. We may further note on the application for rectification filed by the petitioners herein on 15.5.2007 the commission had directed revenue to verify the chart containing the prices. It appears as contend by the learned Counsel for the petitioners that chart was not filed and the rectification application came to be dismissed on 11.12.2007. 7. Having heard Counsel, the order dated 11.12.2007 is set aside. The Commission is directed to consider the application for rectification taking : 4 : into consideration the report to be submitted by the revenue for the respective period of the show cause notices at serial nos.2, 3, & 4 based on average price for that particular period. Revenue to work out the average selling price for the said period and submit the same to the Commission within six weeks. Commission thereafter on hearing petitioners and revenue, to pass appropriate orders according to law. (R.S.Mohite,J) (F.I.Rebello,J) (R.S.Mohite,J) (F.I.Rebello,J) (R.S.Mohite,J) (F.I.Rebello,J)