Merits review and customs valuation law required reconsideration after withdrawal of writ petitions for rectification.

Withdrawal of earlier writ petitions to pursue rectification did not amount to affirmation of the Settlement Commission's original order, so the High Court was required to examine whether that order was lawful; its refusal to consider the merits was unjustified. The valuation issue also involved a pure question of law, namely whether Rule 5(3) of the Customs Valuation Rules, 1988 required adoption of the lowest transaction value of identical goods where more than one such value was available. The matter was therefore to be considered on merits after remand.

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Issues: Whether the High Court was justified in declining to examine the merits of the Settlement Commission's original order on the ground that earlier writ petitions had been withdrawn to pursue rectification, and whether the valuation dispute required consideration of the lowest transaction value under Rule 5(3) of the Customs Valuation Rules, 1988.

Analysis: Withdrawal of the earlier writ petitions to enable filing of rectification petitions did not amount to affirmation of the Settlement Commission's original order. The High Court was required to consider whether that original order was in accordance with law, and its refusal to do so was unjustified. The valuation contention raised a pure question of law concerning application of the rule requiring use of the lowest transaction value of identical goods where more than one such value is available.

Conclusion: The High Court's refusal to enter into the merits was erroneous, and the matter had to be examined on merits after remand.

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