Excise sources said that LG and Dixon have decided to settle the claims by paying up to 50 per cent of the duty demanded as required under the Samadhan scheme. They have already submitted an application to this effect.

The DGAE had, in a show cause sent in March to LG Electronics and Dixon and two senior executives of each company, made a duty demand of Rs 1.7 crore on televisions manufactured between April and September 1997 by the Weston group company for the Korean company.

The authorities felt that the assessable value of television declared by Dixon for calculation of excise dutywas not the correct value as it was marked up when the televisions were sold to the dealers by LG Electronics. They felt that excise should be calculated on the price at which the televisions are sold to dealers and not on the price at which Dixon transferred the television to LG Electronics after manufacturing. The excise authorities had drawn LG Electronics into the case as they felt Dixon and the Korean company were "related persons".