2008 (4) TMI 298 - HC - Central Excise

SCN issued on ground that statutory declarations as laid down under Standards of Weights & Measures (Packaged Commodities) Rules, 1977 are not made on the package containing refrigerators plea of respondent is that package contains only one piece so goods do not satisfy the definition of commodity in packaged form or pre-packed commodity , so Rules, 1977 are not applicable plea of respondent not accepted held that declaration on package is mandatory even if it is only one in a package

Issues Involved:
1. Applicability of the Standards of Weights and Measures Act, 1976, the Standards of Weights and Measures (Enforcement) Act, 1985, and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 to the products manufactured and marketed by the petitioners.
2. Constitutionality of Section 33 of the Standards of Weights and Measures (Enforcement) Act, 1985.
3. Interpretation of "commodity in packaged form" and "pre-packed commodity".
4. Requirement of declarations on packages per the Standards Act and Rules.
5. Legal implications of non-compliance with the Standards Act and Rules.

Detailed Analysis:

1. Applicability of the Standards Act, Enforcement Act, and Rules:
The court examined whether the products manufactured by the petitioners, such as refrigerators, air-conditioners, and washing machines, fell within the ambit of the Standards Act, Enforcement Act, and Rules. The petitioners argued that their products did not qualify as "commodity in packaged form" or "pre-packed commodity" as defined under the relevant laws. They contended that the packaging was primarily for protection during transit and that the products were displayed and sold after inspection by customers.

The court rejected this argument, stating that the definition of "pre-packed commodity" under Rule 2(l) includes any commodity placed in a package without the purchaser being present, with a pre-determined value that cannot be altered without opening the package. The court emphasized that the intention of the manufacturer is irrelevant; what matters is whether the commodity meets the statutory definitions. The court concluded that the products in question are indeed "pre-packed commodities" and must comply with the relevant laws.

2. Constitutionality of Section 33 of the Enforcement Act:
The petitioners challenged Section 33 of the Enforcement Act, claiming it was ultra vires the Constitution of India. However, this contention was not argued before the learned Single Judge and was not raised in the Writ Appeal. Therefore, the court did not address this issue in detail.

3. Interpretation of "Commodity in Packaged Form" and "Pre-Packed Commodity":
The court analyzed the definitions provided in the Standards Act and Rules. It clarified that a "commodity in packaged form" means any commodity packaged in units suitable for sale, whether wholesale or retail. The definition of "pre-packed commodity" under Rule 2(l) includes commodities placed in a package without the purchaser being present, with a pre-determined value that cannot be altered without opening the package. The court disagreed with the interpretations of the Andhra Pradesh and Bombay High Courts, which had excluded certain commodities from these definitions based on their nature and the need for inspection before sale.

4. Requirement of Declarations on Packages:
The court emphasized the importance of declarations on packages as mandated by Rule 6 of the Rules. These declarations include the identity of the commodity, net quantity, unit sale price, sale price of the package, and the name and address of the manufacturer. The court held that these requirements are essential for protecting consumer rights and ensuring transparency in trade.

5. Legal Implications of Non-Compliance:
The court noted that non-compliance with the Standards Act and Rules can lead to penalties under Section 51 of the Enforcement Act. The court dismissed the petitioners' argument that the sale price on packages could vary due to changes in taxes and other factors, stating that Rule 23 provides a mechanism to address such variations while protecting consumer interests.

Separate Judgments:
The court applied the same reasoning to several other cases involving different petitioners and products, dismissing the Original Petitions and allowing the Writ Appeals. The court reiterated that the Standards Act, Enforcement Act, and Rules apply to all commodities that meet the statutory definitions, regardless of the manufacturer's intention or the nature of the product.

Conclusion:
The court concluded that the products manufactured by the petitioners are subject to the Standards Act, Enforcement Act, and Rules. It emphasized the need for compliance with the statutory requirements to protect consumer rights and ensure fair trade practices. The court dismissed the Original Petitions and allowed the Writ Appeals, setting aside the judgments of the learned Single Judge.

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