JUDGMENT

G.C. Mathur, J. - The petitioner is a registered partnership firm which carries on the business of manufacture and supply of glass bottles and phials. The petitioner has been selling the goods manufactured by it at different rates to customers in different zones. With effect from March 1, 1961, excise duty under the Central Excises and Salt Act, 1941, was levied for the first time on glass and glass-wares. The duty levied on such articles was on ad valorem basis. On July 31, 1961, the Deputy Superintendent of Central Excise, Allahabad, sent a letter to the petitioner, a copy of which is annexed as Annexure 1' to the petition. By this letter the petitioner was requested to furnish a fresh price-list with a uniform price variety wise so that assessment of duty may be made on and from August 1, 1961, on the basis of the uniform list. It was also mentioned in this letter that in the event of the petitioner failing to supply such a list the assessments from August 1, 1961, will be made on the basis of the highest of the various prices declared in the petitioner's price list. In effect, this letter directed the petitioner to sell its glass-ware at a uniform price to all its customers wherever situated. One of the grievances of the petitioner is that the directions given in this letter are illegal. The second grievance of the petitioner wises out of the assessment of duty for the period March 21, 1961 to July 31, 1961. For this period of the petitioner had been assessed to duty on the value calculated on the basis of zonal price lists supplied by the petitioner. Subsequently it was discovered that the assessment of duty was not correct and, therefore, a notice of demand dated April 28, 1962, was served upon the petitioner demanding a differential duty amounting to Rs. 4,318.46 p. A copy of this notice of demand is attached as Annexure 'II' to the writ petition. It is con-tended by the petitioner that the original assessment of duty was correct and no differential duty was payable by it.

2. The only question which arises for consideration in this case relates to the determination of the value of the article chargeable with duty on ad valorem basis. Admittedly this is provided for in clause (a) of Section 4 of the Act which reads as hereunder:

"Determination of value for the purposes of duty:

Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be

(a) the wholesale each price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists, ..............".

3. The contention of the petitioner is that according to Section 4 (a) the value of the article is the wholesale cash price for which the article has been or is capable of being sold at the place of sale. The contention of the Department is that the value of the dutiable article is to be determined on the basis of the wholesale cash price for which an article of like kind and quality is sold or is capable of being sold in the wholesale market at the place of production or if a wholesale market does not exist for such article at such place, then the wholesale cash price at the nearest place where such market exists. The difference between the two contentions is this that whereas the petitioner contends that the value is to be determined according to the price prevailing in the wholesale market where he has actually sold his goods, the Department contends that the value is to be determined according to the price in the wholesale market at the place of manufacture or production or at the market nearest to that place. In deciding as to which of the contentions is correct one has