Important point
A commodity if packed in any manner in units suitable for sale whether wholesale or retail becomes a commodity in packed form.

Headnote:Central Excise Act – Section 4A(1) & (2) – Standards of weights and measures(packed commodities) rule, 1977 – Rule 2(1) – Refrigerator - Whether a packaged commodity? – Issuance of notification by Central govt u\s 4A(1) & (2) specifying that goods included in notification were to be valued on basis of maximum retail price which was required to be printed on package of such goods – Entry No. 48 pertained to refrigerators – Writ petition there against by appellant manufacturer of refrigerators on plea that refrigerator was not such a commodity which could be termed to be a packaged commodity and further provisions of Standards of weights and measures Act, 1976 or rules made there under were not applicable to refrigerator at all – Dismissed by High Court – Appeal – No dispute that appellant manufacturer had to sell refrigerators which were packed in polythene cover, thermocol etc and placed in hardboard cartoons – Hence refrigerator clearly became a commodity in packaged form – Perusal of rule 2(1) of Standards of weights and measures(packed commodities) rule, 1977 and Explanation I showed that refrigerator was covered under term prepacked commodity – Even if package of refrigerator was required to be opened for testing, even then refrigerator would continue to be a prepacked commodity – Reliance by High Court on rule 2(1) held correct – Even though MRP might be different depending upon area in which it was being sold – However that not absolved manufacturer from displaying MRP on package in which refrigerator was packed – Once notification included refrigerator, unless validity of notification was challenged, appellant could not get out of scope of notification – Notification could not be faulted, merely because appellant felt that refrigerator was not a packaged commodity – Appeal dismissed.(Paras 4 to 7)
       2007(10) Scale 223 – Relied upon.
       Facts of the case:-
       1.Issue in consideration in present case was whether Refrigerator was a packaged commodity? A notification was issued by Central govt u\s 4A(1) & (2) specifying that goods included in notification were to be valued on basis of maximum retail price which was required to be printed on package of such goods. Entry No. 48 pertained to refrigerators. A Writ petition there against was filed by appellant manufacturer of refrigerators on plea that refrigerator was not such a commodity which could be termed to be a packaged commodity and further provisions of Standards of weights and measures Act, 1976 or rules made there under were not applicable to refrigerator at all. Said writ petition was dismissed by High Court.
       2.Present appeal has been preferred against said order of High Court.
       Findings of the Court :
       The Court held that Perusal of rule 2(1) of Standards of weights and measures (packed commodities) rule, 1977 and Explanation I showed that refrigerator was covered under term prepacked commodity. Even if package of refrigerator was required to be opened for testing, even then refrigerator would continue to be a prepacked commodity. Reliance by High Court on rule 2(1) was held correct. Even though MRP might be different depending upon area in which it was being sold. However that not absolved manufacturer from displaying MRP on package in which refrigerator was packed. Once notification included refrigerator, unless validity of notification was challenged, appellant could not get out of scope of notification. Notification could not be faulted, merely because appellant felt that refrigerator was not a packaged commodity. Appeal was dismissed accordingly.
       Result: Appeal dismissed.

Judgment

V.S. Sirpukar, J. —

1.The short but interesting question as to whether Refrigerator is a “packaged commodity” falls for consideration in this appeal. The appellant is engaged in manufacturing Refrigerators. The Central Government issued a Notification No.9 of 2000 dated 1.3.2000 under Section 4A(1) & (2) of Central Excise Act (for short “the Act”) and specified the goods mentioned in Column 3 of the said notification. Entry No.48 pertains to the refrigerators whereby the Refrigerators invited valuation under Section 4A of the Central Excise Act with the abatement of 40%. Section 4A(1)&(2) of the Central Excise Act require that any goods included in the notification shall be valued on the basis of the Maximum Retail Price (for short “MRP”) which is required to be printed on the packages of such goods. The five conditions for inclusion of the goods are:

“i)The goods should be excisable goods;

ii)They should be such as are sold in the package;

iii)There should be requirement in the SWM Act or the Rules made thereunder or any other law to declare the price of such goods relating to their retail price on the package.

iv)The Central Government must have specified such goods by notification in the Official Gazette;

v)The valuation of such goods would be as per the declared retail sale price on the packages less the amount of abatement.”

2.The appellant felt aggrieved by the fact the Refrigerators were covered and included in the aforementioned notification dated 1.3.2000 as, according to the appellant, the Refrigerator is not such a commodity which is sold in a package. Significantly, the appellant is not aggrieved by its valuation of being under Section 4A(1)&(2) of the Act. The only complaint that the appellant made is that the appellant should not be required to print the MRP on the package of the Refrigerator manufactured by it. The appellant, therefore, filed a Writ Petition before the High Court of Punjab and Haryana praying, inter alia, for a writ of certiorarified mandamus restraining the authorities for taking any coercive measures against the appellant or its Directors, Officers, Servants or Agents for not declaring the MRP on the Refrigerators manufactured and cleared by the appellant from its factory. The notification dated 1.3.2000 was challenged to this limited extent only. Before the High Court the appellant pleaded that Refrigerator is not such a commodity which can be termed to be a “packaged commodity” and further the provisions of The Standards of Weights and Measures Act, 1976 (for short “SWM Act’) or the Rules made thereunder are not applicable to the Refrigerator at all. It was, therefore, prayed that the notification was liable to be quashed only to the extent that it included the Refrigerator and the requirement of declaring MRP on the Refrigerator.

3.The Respondent Authorities, however, maintained that the Refrigerator was in fact sold in a package of polythene cover, thermocol, hardboard cartons etc., and thus it falls in the category of “pre-packed commodity”. On that basis it was contended that since every packaged commodity was included in the SWM Act and the Rules made thereunder, there can be no escape from printing the MRP on the package. The High Court rejected the contention and dismissed the petition filed by the appellant. Hence the present appeal before us.

4.Learned counsel very vehemently contended that a Refrigerator, as a matter of fact, is not sold in a packaged form. The thrust of the argument is that even if it is sold in the packaged form, when it is displayed by the dealers, it is not in the packaged form and the customers can take the inspection of the Refrigerator and atleast for that purpose the package has to be opened and, therefore, there would be no question of the Refrigerator being included in the SWM Act or the Rules made thereunder. The submission is quite incorrect. When we see various provisions of the SWM Act and the Rules made thereunder, it is clear that Section 2(b) defin

Click Here to Read the rest of this document

2007 Supreme(SC) 1418

2007(7) Supreme 528Supreme Court of indiaAshok Bhan & H.S. Bedi & V.S. Sirpurkar, JJ.Whirlpool of India Ltd. — AppellantVersusUnion of India & Ors. — RespondentAppeal (civil) 7417 of 2001Decided on 02/11/2007

Important pointA commodity if packed in any manner in units suitable for sale whether wholesale or retail becomes a commodity in packed form.

2007(7) Supreme 528
Supreme Court of india
Ashok Bhan & H.S. Bedi & V.S. Sirpurkar, JJ.
Whirlpool of India Ltd. — Appellant
Versus
Union of India & Ors. — Respondent
Appeal (civil) 7417 of 2001
Decided on 02/11/2007

Important point
A commodity if packed in any manner in units suitable for sale whether wholesale or retail becomes a commodity in packed form.