2001 (8) TMI 131 - HC - Central Excise

Summary

Issues Involved:
1. Is the action of the authorities in requiring the petitioner to declare the 'Maximum Retail Price' on the cartons containing Refrigerators arbitrary and illegalRs.
2. Should the court stay the operation of the notification dated March 1, 2000, due to pending writ petitions in different High CourtsRs.

Issue-wise Detailed Analysis:

Issue 1: Declaration of Maximum Retail Price (MRP) on Refrigerators
The petitioner, a manufacturer of refrigerators, challenged the requirement to declare the MRP on the cartons of refrigerators as mandated by a notification dated March 1, 2000, issued under Section 4A of the Central Excise Act, 1944. The petitioner argued that refrigerators are not "packaged commodities" and thus should not fall under the purview of the Standards of Weights and Measures Act, 1976 (the 1976 Act) or the related Rules.

The court examined the purpose and provisions of the 1976 Act, which aims to protect consumers by ensuring proper labeling on packaged commodities, including the identity, quantity, and price. Section 2(b) of the 1976 Act defines a packaged commodity as one packed in any form suitable for sale. The court noted that the petitioner's own admission that refrigerators are packed in polythene covers, thermocol, and hardboard cartons qualifies them as packaged commodities under the Act.

Further, the court referred to Rule 2(1) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, which includes any commodity placed in a package for sale, even if the package is opened for testing. The explanation added to this rule in 1992, which cites an electric bulb as a pre-packed commodity despite the need for testing, supports the inclusion of refrigerators as pre-packed commodities.

The court concluded that since the refrigerators are indeed packaged commodities, the notification under Section 4A of the Central Excise Act is valid. The notification mandates the declaration of MRP on the packaging to ensure proper excise duty calculation based on the retail price minus abatement.

Issue 2: Stay of Notification Due to Pending Writ Petitions
The petitioner argued that since similar issues are pending in other High Courts with interim stays granted, the current court should also stay the operation of the notification. The court examined the principles behind Section 10 of the Code of Civil Procedure, which prevents simultaneous trials of the same issue between the same parties in different courts.

The court noted that the petitioner had initiated proceedings in multiple High Courts, including the present case. The court found that not all parties involved in the current case are parties in the other pending cases, specifically noting that Respondent No. 2 is not involved in the other High Court cases. Therefore, the principle of staying proceedings does not apply here.

The court also emphasized that admitting the petition and granting a stay based solely on pending cases in other High Courts would be unjust and could lead to delays detrimental to both the industry and revenue collection. The court decided to proceed with the hearing and rejected the petitioner's request for a stay.

Conclusion
The court held that the action of the authorities in requiring the petitioner to declare the MRP on the packing of refrigerators is not arbitrary, illegal, or unfair. Additionally, the court found no merit in staying the operation of the notification due to pending writ petitions in other High Courts. The petition was dismissed, and the parties were left to bear their own costs.