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TMI BlogWHETHER ELECTRONIC PRINTERS ARE TO BE CONSIDERED AS PACKAGED COMMODITYX X X X Extracts X X X X X X X X Extracts X X X X ..... WHETHER ELECTRONIC PRINTERS ARE TO BE CONSIDERED AS PACKAGED COMMODITY - By: - Mr. M. GOVINDARAJAN - Other Topics - Dated:- 25-12-2011 - - In TVS Electronics Limited V. Union of India and others 2009 (248) ELT 55 (AP) the petitioner company is engaged in the business of import manufacture, distribution and sale of computer peripherals like inkjet printers, DOT Matrix printers, printer cartridges etc., which are marketed in various states including Andhra Pradesh. On 16.8.2000 an Inspector of Legal Metrology Department inspected M/s Elite Electronic Industries, Labbipet, Vijayawada and found one retail package of MSP 245 9 wire 136 columns DOT Matrix printer manufactured by TVS Electronics without marking of sale price. A show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use notice was issued to the company to submit explanation as to why action should not be taken for violation of Rules 4 and 6(1)(f) of Package Rules and Section 39 of the Standards of Weights and Measurement Act, 1976. On 4.12.2000 also the inspection was carried out and found that one retail package of Lexmark 211 color jet printer was being sold and that said package does not contain name and address of importer and retail sale price. The petitioners were also informed that the offence is compoundable under Section 73 of the Act. The petitioner filed reply to the show cause notice. But the same was not accepted. Hence the petitioner challenged the communication of the Department before the High Court through a writ petition. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contentions of the petitioner are as below: The Act and the Package Rules have no application to electronic printers; In the absence of notification under Section 1(3)(d) of the Act notifying computer inkjet/DOT Matrix printer as commodity in packaged form the Act and the Rules cannot be applied to the goods manufactured by the petitioners; Ink jet/DOT Matrix printer is not a commodity and it cannot be treated as a commodity in packaged form ; Electronic printers are fragile and sensitive and therefore they are offered for the sale protecting them in package form with proper insulation;; Even though electronic printers are kept in well insulated packages, they cannot be treated as commodity in packaged form or packaged co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmodities because a person who buys them cannot be readily use without installation of software printer driver in PCs with which printers are intended to be used. The contentions of the Department are as follows: Personal computers, printers and printer accessories marketed and distributed by petitioners in pre-packed form, attract provisions of Package Rules; The products are manufactured in one state and sold throughout the country; therefore they come under inter-state transactions; Petitioners are required to comply with the provisions of the Act and Rules; Even if petitioners products are sold as a single piece, they come under the provisions of the Rules; Therefore it is required to make declaration on the package with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to name and address of manufacturer, name of commodity, quantity, month and year of package as well as retail sale price in MRP inclusive of all taxes; Petitioners have not complied with provisions of Rule 4 and 6 of the Package Rules and therefore action initiated against them is legally valid. The Civil Supplies, through its Government Pleader put forth the following arguments: The Government of India issued notification dated 26.9.1997 under Section 1(3) of the Act appointing 26.9.1997 as day on which certain provisions of the Act shall come into force and therefore no further notification is necessary under Section 1(3)(d) of the Act; Electronic printer is commodity in packaged form as per 2(b) of the Act and fall w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the definition of pre-packed commodity as per Rule 2(l) of the Rules; Section 39(9) of the Act and Rule 34 provide for exempting specified goods from provisions of the Act and in the absence of exemption given to electronic printers manufactured by petitioners cannot escape applicability of provisions of the Act and the Rules; As per Rule 33 of Package Rules all pre packed commodities imported into India shall have to carry declaration and details as specified; The color inkjet/DOT Matrix printers supplied TVS Electronics to retailers do not comply with the provisions of Rule 2(l) and 2(p) of Package Rules and therefore the petitioners are liable. The Points for determination by the High Court are- Whether provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act and Rules made there under including Package Rules can be applied and enforced even in the absence of any specific notification under Section 1(3)(d) of the Act? Whether electronic printers manufactured, distributed and marketed by TVS Electronics or their retail dealers can be treated as commodities in packaged form and/or pre-packed commodities for the purpose of the Act and Package Rules. The High Court analyzed the provisions of Section 1(3) of the Act. The said section gives power to the Central Government to bring into force the provisions of the Act. It also confers power to appoint different dates for enforcement of the Act for different areas, classes of undertakings, classes of goods, classes of weights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and measures or classes of users of weights and measures. The legislative choice to use the word OR after end of Section 1(3)(e) of the Act would clinchingly show that a notification appointing the date for the purpose of enforcing the provisions of the Act takes within its fold all other aspects into provisions of the Act, there need not be separate notification with reference to the areas, classes of undertakings, classes of goods etc., The Government appointed 26.9.1997 as appointed date for some sections, 1.4.1980 as appointed date for Sections 76 and 77 and on 1.7.1987 as appointed date for remaining sections under the powers of Section 1(3) of the Act. The High Court held that once those sections come into force, there is no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement that there must be a different notification specifying the different dates for different provisions of the Act to be brought into force for various areas etc., Therefore the High Court held that the submission vide point No. 1 by the petitioners could not be accepted. For the second point the Court is to consider whether electronic printer is a commodity ; if yes whether it can be considered as a pre-packed commodity . The term commodity is not defined in the Act. The ordinary meaning for the term commodity is a raw material or primary agricultural product that can be bought and sold, or a useful or valuable thing. The Parliament has used the meaning in a broader sense. All valuable things which are offered for sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are commodities for the purposes of the Act. Chapter IV of Part of IV of the Act (Sec. 39 only) deals with commodities in packaged form intended to be sold in course of inter-state trade or commerce.. Sec. 39(1) of the Act prohibits manufacturing, packaging and/or selling any commodity in packaged form unless such package bears label to identify the commodity in the package, the accurate number of commodities in the package, the unit sale price. Section 39(9) of the Act empowers the Central Government to exempt classes of commodities. Admittedly the petitioner imports electronic printers in knocked down condition, assembles/manufactures electronic printers and transfers them to distribution center/office in Hyderabad, who in turn s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell through a network of retail dealers. Though a retail dealer pay sale price to Hyderabad office of TVS Electronics, ultimately it is intended to reach their office at Chennai. This satisfies description of inter-state trade or commerce, as defined in Section 2(m) of the Act. Thus Section 39 read with Section 31 apply to the electronic printers. The Court held that electronic printers are commodities since they are manufactured, distributed and sold. If an electronic printer can be sold providing necessary insulation in a cardboard box, so as to protect it from damage, it can be covered under the definition of commodity in packaged form attracting Package Rules because it becomes pre-packed commodity. Thus an electronic printer w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is packed in the absence of the customer, after it is removed it undergoes perceptible modification and therefore it falls within the category of pre-packed commodity. Therefore the Court held that the provisions of the Act and Rules are applicable to the petitioners and they to comply with the provisions of the Act and Rules - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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