2007 (11) TMI 6 - SC - Central Excise

Valuation(Central Excise) - Revenue contended that the goods (refrigerator) manufactured by appellant is a packaged commodity and require to mention MRP on it but appellant is not agreed with it - Held that revenue contention was correct and allowed

Summary

Issues:
1. Whether a Refrigerator is considered a "packaged commodity" under the Central Excise Act.
2. Whether the requirement to print Maximum Retail Price (MRP) on the package of Refrigerators is valid.

Issue 1:
The appellant contested the inclusion of Refrigerators as a "packaged commodity" under a Central Government notification, arguing that Refrigerators are not sold in a package. The High Court upheld the contention that Refrigerators are indeed sold in a packaged form, as they are packed in polythene cover, thermocol, and hardboard cartons. The court referred to the definition of "commodity in packaged form" under the Standards of Weights and Measures Act, which includes commodities packed in units suitable for sale. The court also cited the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, which define a "pre-packed commodity" to encompass products placed in a package with a pre-determined value that cannot be altered without opening the package. The court concluded that Refrigerators meet the criteria of a "pre-packed commodity" and are subject to the requirement of printing MRP on the package.

Issue 2:
The appellant argued that customers often inspect Refrigerators displayed by dealers without the package, and thus, the requirement to print MRP on the package is unnecessary. However, the court emphasized that even if the package needs to be opened for testing, the product remains a "pre-packed commodity" under the SWM Act. The court highlighted that the sale of Refrigerators falls under "retail sale," necessitating compliance with the SWM Act and SWM (PC) Rules. The court rejected the appellant's contention that variations in MRP based on the selling area justify not printing MRP on the package, emphasizing that the obligation to display MRP remains regardless of the selling location. Ultimately, the court affirmed that Refrigerators are classified as a "packaged commodity" under the SWM Act and SWM (PC) Rules, and the notification requiring MRP printing on the package is valid.

Additional Judgment:
The court referenced a previous case, Jayanti Food Processing (P) Ltd. vs. Commissioner of Central Excise, Rajasthan, where it was established that Refrigerators are to be assessed under Section 4A of the Central Excise Act. The court confirmed the High Court's judgment, dismissing the appeal and upholding the requirement to print MRP on Refrigerator packages.