Per K.K. Bhatia :

The appellants at their salt lake works, Kolkata manufacture 'Vaccum Interrupter Tubes and Vacuum Contractor units' etc. falling under Heading Nos. 8538.00 and 8535.00. On scrutiny of the invoices issued by them during the year 1994-95 (upto 25.3.95) by the departmental authorities, it was observed that they had removed such goods for delivery to different independent buyers as well as to their own units viz., M/s. A.E.I. Works, and Naini Works etc. on payment of duty. It was observed that the prices shown in the invoices for delivery to their own units were much less for similar/comparable goods compared to the prices of the same goods removed to the independent buyers. The departmental authorities therefore, held the view that the value of the goods for payment of duty from one unit to the other of the same company was required to be adopted on the basis of the prices available for delivery of the comparable goods to the independent buyers in terms of Rule 4 (1) (b) of the Central Excise (Valuation) Rules, 1975. Accordingly, the appellants were issued a show cause notice dated 18.7.95 by the Commissioner of Central Excise, Kolkata-II in which it was averred