http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

CASE NO.: Appeal (civil)  7417 of 2001

PETITIONER: Whirlpool of India Ltd

RESPONDENT: Union of India & Ors

DATE OF JUDGMENT: 02/11/2007

BENCH: Ashok Bhan & H.S. Bedi & V.S. Sirpurkar

JUDGMENT: J U D G M E N T

CIVIL APPEAL No.7417 OF 2001

V.S. SIRPUKAR, J

1.      The short but interesting question as to whether Refrigerator is a  \023packaged commodity\024 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 \023the Act\024) 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 \023MRP\024)  which is required to be printed on the packages of such goods.  The five  conditions for inclusion of the goods are: \023i)  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.\024

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

is not such a commodity which can be termed to be a \023packaged  commodity\024 and further the provisions of The Standards of Weights and  Measures Act, 1976 (for short \023SWM Act\024) 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 \023pre-packed  commodity\024.  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) defines  \023commodity in packaged form\024.  The definition says: \023commodity in packaged form\024 means commodity packaged,  whether in any bottle, tin, wrapper or otherwise, in units  suitable for sale, whether wholesale or retail.\024

It was not disputed before the High Court and also before us that the  appellant-manufacturer has to sell the Refrigerators which are packed in  polythene cover, thermocol, etc., and placed in hard board cartons.  In fact  the appellant had so pleaded before the High Court in para 3 to which a  reference has been made by the High Court.  Once that position is clear,  then the Refrigerator clearly becomes a commodity in the packaged form.   The use of the terms \023or otherwise\024 in the definition would suggest that a  commodity if packed in any manner in units suitable for sale, whether  wholesale or retail, becomes a \023commodity in packed form\024.  In the year  1977 The Standards of Weights and Measures (Packaged Commodities)  Rules, 1977 (for short \023SWM (PC) Rules\024).  Rule 2(l) defines \023pre packed  commodity\024 which is as under: \023\024pre-packed commodity\024 with its grammatical variations and  cognate expressions, means a commodity or article or articles  which, without the purchaser being present, is placed in a  package or whatever nature, so that the quantity of the product  contained therein has a pre-determined value and such value  cannot be altered without the package or its lid or cap, as the  case may be, being opened or undergoing a perceptible  modification and the expression \023package\024, wherever it occurs,  shall be construed as a package containing a pre-packed,  commodity.\024 Explanation I- Where, by reason merely of the opening of a  package no alteration is caused to the value, quantity, nature  or characteristic of the commodity contained therein, such  commodity shall be deemed, for the purposes of these rules, to  be a pre-packed commodity, for example, an electric bulb or  fluorescent tube is a pre-packed commodity, even though the  package containing it is required to be opened for testing the  commodity. Explanation II  Not relevant.\024

A glance at this provision and more particularly to Explanation I would  suggest that the Refrigerator is covered under the term \023pre-packed  commodity\024.  Even if the package of the Refrigerator is required to be  opened for testing, even then the Refrigerator would continue to be a \023pre- packed commodity\024.  There are various types of packages defined under

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

the Rules and ultimately Rule 3 specifically suggests that the provisions of  Chapter II would apply to the packages intended for \023retail sale\024 and the  expression \023package\024 would be construed accordingly.  It is not disputed  before us that the sale of the Refrigerator is covered under the \023retail sale\024.   Once that position is clear Rule 6 would specifically include the Refrigerator  and would carry along with it the requirements by that Rule of printing  certain information including the sale price on the package.  Thus it is clear  that by being sold by the manufacturer in a packaged form, the Refrigerator  would be covered by the provisions of SWM Act and SWM (PC) Rules and  it would be imperative that the MRP has to be printed in terms of Rule 6  which has been referred to above.  The High Court has also made a  reference to Rule 2(l) and more particularly, the Explanation to which we  have referred to earlier.  In our view the reliance by the High Court on Rule  2(l) is correct.  Learned counsel tried to urge that every customer would like  to open the package before finalizing to purchase the Refrigerator.  He  would atleast get it tested and for that purpose the package would be  destroyed.  That may be so but it does not change the position as rightly  observed by the High Court.   5.      It was tried to be suggested that the MRP would be different  depending upon the area in which it is being sold.  That may be so,  however, that cannot absolve the manufacturer from displaying the price,  i.e., the MRP on the package in which the Refrigerator is packed.   Whatever be the situation, it is clear that a Refrigerator is a \023packaged  commodity\024 and thus is covered under SWM Act and SWM (PC) Rules and  therefore, the notification dated 1.3.2000 cannot be faulted on that ground.   It is significant to note that the appellant has not otherwise challenged the  validity of the notification dated 1.3.2000 on any other ground.  All that is  challenged is the applicability of the commodity like the Refrigerator. 6.      Once the notification included the Refrigerator, unless the validity of  the notification was challenged, the appellant cannot get out of the scope of  the notification.  The notification cannot be faulted merely because the  appellant feels that the Refrigerator is not a packaged commodity.  We  have already shown that the Refrigerator is a \023packaged commodity\024 and  once it is included in the notification, unless the notification is faulted on  any other ground, the effect of the notification would remain intact in so far  as Refrigerator is concerned.  On that ground also the appeal has to be  rejected. 7.      In fact the question regarding the assessment of the Refrigerator  was considered by this Court in  Jayanti Food Processing (P) Ltd. vs.  Commissioner of Central Excise, Rajasthan [2007 (10) SCALE 223]  where it was held that the Refrigerators have to be assessed under Section  4A of the Act and not under Section 4 of the Act.  The present contention,  however, was not raised in that case. 7.      In the result the Judgment of the High Court is confirmed and the  appeal is dismissed with costs.