State Of Maharashtra & Ors vs Subhash Arjundas Kataria

2) For convenience, let us briefly state the facts in Civil Appeal No. 1117 of 2010. According to the respondent, he is engaged in the business of trading in sun glasses and has a counter on commission basis at Globus Stores, Bandra. On 17.10.2003, the Inspector of Legal Metrology/Appellant No. 2 herein visited the store and seized five Sun glasses belonging to the respondent and issued a seizure memo. At the time of search, it was explained to him that the sun glasses delivered to them were in polythene bags and some in individual openable pouches. According to them, sometimes, at the time of delivery, they are put in a pouch which is normally on display for the customers to identify for the purpose of purchase. It 2 was also explained that the package, therefore, is only a package for protection or safety of the article. The value of sun glasses whether inside the package or outside the package does not alter if the package is opened nor does it undergo a perceptive modification on the package being opened. The testing of the sunglasses by the customer is for the purpose of determining whether he should purchase the same considering various sizes, designs, colours, aesthetic value, makes and companies and after trying and ascertaining the suitability, quality etc.

The appellant-Whirlpool was engaged in manufacturing refrigerators. The Central Government issued Notification No. 9 of 2000 dated 01.03.2000 under Sections 4-A(1) and (2) of the Central Excise Act and specified the goods mentioned in 8 Column 3 of the said notification. Entry 48 pertains to the refrigerators whereby the refrigerators invited valuation under Section 4-A of the Central Excise Act with the abatement of 40%. Sections 4-A(1) and (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:

determined value and that value cannot be altered without the package sold being opened at the time of sale or the product undergoes a modification on being opened. We are also of the view that the Explanation I to Rule 2(l) of the Rules is not attracted because the package is not opened for the purpose of testing as in the case of electric bulbs. We fully agree that the sun glasses are tested by the buyer for his suitability, and therefore, sun glasses, whether it be a frame or glass is not a pre-packed commodity within the definition of the expression "pre-packed" under Rule 2(l) of the Rules, hence, the High Court is fully justified in quashing the notice and allowing the writ petition filed by the respondent. We also agree with the 7 similar arguments advanced relating to other products mentioned above.

15) After adverting to Rule 2(l) "pre-packed commodity" and Explanation I, their Lordships have held that refrigerator is covered under the term "pre-packed commodity" and concluded that:

19) Accordingly, we direct the Registry to place all these appeals before Hon'ble the Chief Justice of India for listing before a larger Bench.

1) This appeal by State of Maharashtra is directed against the judgment and order dated 08.12.2006 passed by the High Court of Judicature at Bombay in Writ Petition No. 2982 of 2006 whereby the High Court allowed the writ petition of the Ist respondent herein.

4) The High Court, by impugned order dated 08.12.2006 allowed the writ petition by holding that the packages containing Candy man, Minto-Fresh, Kitchens of India, Badam Halwa and Ashirvaad Atta are not wholesale package within 19 the definition of the expression "wholesale package" under Rule 2(x) of the Rules.

5) Questioning the said order of the High Court, the State filed the above appeal by way of special leave.

Every wholesale package shall bear thereon a legible, definite, plain and conspicuous declaration as to,-

(a) the name and address of the manufacturer or where the manufacturer is not the packer, of the packer;

(b) the identity of the commodity contained in the package; and

(c) the total number of retail packages contained in such wholesale package or the net quantity in terms of standard units of weights, measures or number of the commodity contained in wholesale package:

As demonstrated before the High Court, the counsel appearing for the Ist respondent placed all the above-mentioned products before us i.e. both the wholesale package as well as the retail package. The Department's only contention was that the secondary package in which the wholesale package was packed does not contain the said information. In the light of the provisions which we have referred above and on verification of the products which were shown to us, we are of 22 the view that the secondary outer packing for transportation or for safety of the goods being transported or delivered cannot be described as a wholesale package.

10) On going through the statutory provisions which we have adverted to in the earlier paras and on verification of the products which were shown to us during the course of argument, we fully agree with the conclusion arrived at by the High Court. Consequently, the appeal fails and the same is dismissed with no order as to costs.

AUGUST 26, 2011.