Holding

A refrigerator is a packaged commodity under the Standards of Weights and Measures Act and Rules, so the MRP‑printing requirement in Notification No. 9 of 2000 is valid.

Summary

Whirlpool of India Ltd, a refrigerator manufacturer, challenged Notification No. 9 of 2000 issued under Section 4A of the Central Excise Act, which required the maximum retail price (MRP) to be printed on the package of goods. The company argued that a refrigerator is not a “packaged commodity” within the meaning of the Standards of Weights and Measures Act, 1976 and its 1977 Rules, and therefore should not be subject to the MRP‑printing requirement. The Court examined the definition of “commodity in packaged form” under Section 2(b) of the SWM Act and the definition of “pre‑packed commodity” under the Packaged Commodities Rules, finding that refrigerators are sold in polythene, thermocol and carton packaging, making them packaged commodities. Consequently, the requirement to print the MRP on the package applies, and the notification remains valid. The appeal was dismissed with costs.

Issues considered

Whether a refrigerator qualifies as a “commodity in packaged form” under Section 2(b) of the Standards of Weights and Measures Act, 1976 and the Packaged Commodities Rules, 1977.
Whether the requirement to print the Maximum Retail Price on the package under Notification No. 9 of 2000, issued under Section 4A of the Central Excise Act, is applicable to refrigerators.
Whether a challenge limited to the alleged non‑packaged nature of the refrigerator can invalidate the notification without attacking its overall validity.

Legislation cited

Central Excise Act, 1944s. 4A(1), s. 4A(2)
Standards of Weights and Measures Act, 1976s. 2(b)
Standards of Weights and Measures (Packaged Commodities) Rules, 1977s. 2(1), s. 3, s. 6

Subjects

Central ExciseMaximum Retail PricePackaged commodityStandards of Weights and MeasuresNotificationSection 4APre‑packed commodityRefrigerator

Judgment

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WHIRLPOOL OF INDIA LTD. A
v.
UNION OF INDIA AND ORS.

NOVEMBER 2, 2007
B
[ASHOK BHAN, H.S. BEDI AND V.S. SIRPURKAR, JJ.]

Central Excise Act 1944-s. 4 A (1) and (2)-Notification under-
One ofthe conditions for inclusion ofthe goods in the Notification that
it should be 'packaged good'-/nclusion of Refrigerator in the C
Notification-Challenged only on the ground that it is not a 'packaged
. good '-Held: Reji-igerator is a 'packaged commodity' under Standards
ofWeights and Measures Act and Rules.framed thereunder-Hence its
inclusion in Notification not wrong on this ground, unless validity of
the Notification is challenged otherwise-Standards of Weights and D
Measures Acf. 1976-s. 2(b)-Standards of Weights and Measures
(Packaged Commodities) Rules, 1977-rr. 2(1), 3 and 6.
By Notification No. 9 of2000 dated 1.3.2000 under section 4A
(1) and (2) of Central Excise Act, the goods mentioned in Column 5
of the Notification were to be valued on the basis of Maximum Retail E
Price which was required to be printed on the packages of such
goods. Few of the Conditions for inclusion of the goods in the
Notification was that the goods should be such as were sold in the
package and there should be requirement in the Standards of
j \Veights and Measures Act, 1976 or the Rules framed thereunder F
or any other law to declare the price of such goods relating to their
retail price on the package. Appellant (manufacturer of Refrigerator)
was aggrieved by inclusion of Refrigerator in the Notification on the
ground that it should not be required to declare the MRP on the
refrigerators as the same cannot be termed as a 'packaged G
commodity' and the provisions of Standards of Weights and
Measures, Act, 1976 or the Rules made thereunder were not
applicable to it. Appellant filed Writ Petition challenging the

869 H
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870 SUPREME COURT REPORTS [2007] 11 S.C.R.
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A Notification to this limited extent. High Court dismissed the Writ
Petition. Hence the present appeal.

Dismissing the appeal~ the Court
HELD: 1. It was not disputed that the appellant-manufacturer
B has to sell the Refrigerators which are packed in polythene cover, ~-

thermocol, etc., and placed in hard board cartons. Once that position ""'
is clear, then the Refrigerator clearly becomes a commodity in the
packaged form. [Para 4] (873-D, E]
2. The use of the terms "or otherwise" in the definition of
c 'Commodity in packaged form' u/s 2 (b) of Standards of Weights and
Measures Act would suggest that a commodity if packed in any
manner in units suitable for sale, whether wholesale or retail,
becomes a "commodity in packed form". Even if the package of the
Refrigerator is required to be opened for testing, even then the
D ~
Refrigerator would continue to be a "pre-packed commodity". There r
are various types of packages defined under the Rules and ultimately
Rule 3 of Standards of Weights and Measures (Packaged
Commodities) Rules, 1977 specifically suggests that the provisions
of Chapter II would apply to the packages intended for "retail sale"
E and the expression "package" would be construed accordingly. Once
the position that the Refrigerator is not covered under the 'retail
sale' 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
F is clear that by being sold by the manufacturer in a packaged form, ~
the Refrigerator would be covered by the provisions of the Act and
the Rules and it WOI:fld be imperative that the MRP has to be printed
in terms of Rule 6. [Para 4] (873-E, F; 874-C, D, E, F]
3. Even if the MRP would be different depending upon the a~ea
G
in which it is being sold, that cannot absolve the manufacturer from ~t-
displaying the price, i.e., the MRP on the package in which the
Refrigerator is packed. A Refrigerator is a "packaged commodity"
and thus is covered under the Act and the Rules and therefore, the .,f
notification dated 1.3.2000 cannot be faulted on that ground. The
H
WHIRLPOOL OF INDIA LTD. v. UNION OF INDIA 871
[V.S. SIRPURKAR,J.]
appellant has not otherwise challenged the validity of the Notification A
on any other ground. 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
-1 is not a packaged commodity. [Paras 5 and 61 [875-A, B, CJ B
Jayanti Food Processing (P) Ltd. v. Commissioner of Central
Excise, Rajasthan. (2007) 10 SCALE 223, relied on.
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CIVIL APPELLATE JURISDICTION·: Civil Appeal No. 7417 of ,
2001. q
From the final Judgment and Order dated 13.08.2001 of the High
Court of Punjab & Haryana at Chandigarh in Civil Writ Petition No. 13697
of2000.
Sanjeev Narula and Jay Kishor Singh (for Subramonium Prasad) for D
the Appellant.
K. Radhakrishnan, B. Sunita Rao, P.S. Narsimha and Ajay Sharma
(for B. Krishna Prasad and B.V. Balaram Das) for the Respondents.
The Judgment of the Court was delivered by E
V.S. SIRPURKAR, J. 1. The sh011 but interesting question as to
whether Refrigerator is a "packaged commodity" 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 w1der Section 4A(l) & (2) of Central Excise Act (for sh011 "the F
Act") 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 G
basis of the Maximum Retail Price (for short "MRP") which is required
1

to be printed on the packages of such goods. The five conditions for
inclusion of the goods are:
"(i) The goods should be excisable goods; H
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872 SUPREME COURT REPORTS (2007] 11 S.C.R.
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A (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 dedare the price of such
goods relating to their retail price on the package.

B (iv) The Central Government must have specified such goods by r-
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."
2. The appellant felt aggrieved by the fact the Refrigerators were
c 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
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required to print the MRP on the package of the Refrigerator manufactured r
by it. The appellant, therefore, filed a Writ Petition before the High Court
of Punjab and Haryana praying, inter alia, for a writ of certiorari tied
mandamus restraining the authorities for taking any coercive measures
against the appellant or its Directors, Officers, Servants or Agents for not
E 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 is not such a commodity which can be termed to be a '

"packaged commodity" and fmther the provisions of The Standards.·of
F Weights and Measures Act, 1976 (for short "SWM Act") 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.
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3. The Respondent Authorities, however, maintained that the ~
Refrigerator was in fact sold in a package of polythene cover, thermocol,
hardboard caitons etc., and thus it falls in the category of "pre-packed
commodity". On that basis it was contended tl1at since every packaged
H conunodity was included in the SWM Act and the Rules made theretmder,
j WHIRLPOOLOFINDIALTD. v. UNION OF INDIA 873
[V.S. SIRPURKAR, J.]

there can be no escape from printing the MRP on the package. The High A
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 B
argument is that even ifit 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 C
thereunder. The submission is quite incorrect. When we see varioµs
provisions of the SWM Act and the Rules made thereunder, it is cle.ar
that Section 2(b) defines "commodity in packaged form". The definition
says:
"commodity in packaged form" means commodity packaged, D
whether in any bottle, tin, wrapper or otherwise, in units suitable
for sale, whether wholesale or retail."
It was not disputed before the High Court and also before us that the
appellant-manufacturer has to sell the Refrigerators which are packed iti
polythene cover, thermocol, etc., and placed in hard board cartons. Jn. E
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 "or otherwise" in the definition would suggest that a
commodity if packed in any manner in units suitable for sale, whether F
wholesale or retail, becomes a "commodity in packed form". In the year
1977 The Standards of Weights and Measures (Packaged Commodities)
Rules, 1977 (for short "SWM (PC) Rules"). Rule 2(1) defines "pre
packed commodity" which is as under:
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""pre-packed commodity" 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 tlmt the quantity of the product contained
therein has a pre-detemrined value and such value cannot be altered H
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874 SUPREME COURT REPORTS [2007] 11 S.C.R.
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A without the package or its lid or cap, as the case may be, being
opened or undergoing a perceptible modification and the
expression "package'', wherever it occurs, shall be construed as
a package containing a pre-packed, commodity."
Explanation I- Where, by reason merely of the opening of a
B package no alteration is caused to the value, quantity, nature or _..,
t-
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
c containing it is required to be opened for testing the commodity.
Explanation II Not relevant."
A glance at this provision and more particularly to Explanation I would
suggest that the Refrigerator is covered under the term "pre-packed
D commodity". Even ifthe package of the Refrigerator is required to be -~
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opened for testing, even then the Refiigerator would continue to be a "pre-
packed commodity". There are various types of packages defined under ·
the Rules and ultimately Rule 3 specifically suggests that the provisions
of Chapter II would apply to the packages intended for "retail sale" and
E the expression "package" would be construed accordingly. It is not
disputed before us that the sale of the Refrigerator is covered under the
"retail sale". Once that position is clear Rule 6 would specifically include l ~

the Refrigerator and would carry along with it the requirements by that /.'
Rule of printing certain infonnation including the sale price on the package.
F Thus it is clear that by being sold by the manufacturer in a packaged fonn, ~
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(1) and more particularly, the
G Explanation to which we have referred to earlier. In our view the reliance
by the High Court on Rule 2(1) 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 i:nay be so but it does
H not change the position as rightly observed by the High Court.
WHIRLPOOL OF INDIA LTD. v. UNION OF INDIA 875
[V.S. SIRPURKAR, J.]
5. It was tried to be suggested that the MRP would be different A
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 "packaged
commodity" and thus is covered under SWM Act and SWM (PC) Rules B
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. C
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 "packaged commodity" and D
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.
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7. In fact the question regarding the assessment of the Refrigerator
was considered by this Court in Jayanti Food Processing (P) Ltd. v.
Commissioner of Central Exc_ise, 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, F
however, was not raised in that case.
8. In the result the Judgment of the High Court is confirmed and the
appeal is dismissed with costs.
K.K.T. Appeal dismissed. G