Paragraph numbers below are the court’s original numbering, recovered from the source text.
10. In the facts of the case, chewable tobacco has been notified under sub-section (1) of Section 4A. The question is whether the provisions of the said Rules framed under the Standards of Weights and Measure (PC) Rules, 1977, require a declaration of retail sale on the packages of the respondent. In short, the controversy is whether the packages made by the respondent-assessee are such that under the said Rules, there is a requirement to declare the retail price of the goods on the packages.
11. Now, we turn to the said Rules. Chapter II of the said Rules deals with the provisions applicable to packages intended for retail sale. Retail sale is defined in Rule 2(q) of the said Rules, which reads thus: “(q) “retail sale” in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales agencies or other instrumentalities for consumption by an individual or group of individuals or any other consumer;” Therefore, to attract the definition of retail sale, a commodity has to be sold, distributed, or delivered for consumption by an individual, a group of individuals, or any other consumer. Thus, the sale or distribution of a commodity to a dealer who, in turn, sells the commodity to retail dealers will not be a retail sale.
12. Rule 2(g) defines group package which reads thus: “2(g) “group package” means a package intended for retail sale, containing two or more individual packages, or individual pieces, of similar, but not identical (whether in quantity or size), commodities; 124 Explanation.- Commodities which are generally the same but differ in weight, measure or volume, appearance or quality are similar but not identical commodities;” Therefore, a package can become a group package, provided it is intended for retail sale. In this case, there is no dispute that the respondent’s poly packs and HDPE bags contain more than 2 individual packages of similar commodities but are not identical in quantity. The question is whether the package made by the respondent was intended for retail sale.
13. Rule 2(x) of the said Rule defines “wholesale package”, which reads thus: “(x) “wholesale package” means a package containing- (i) a number of retail packages, where such first mentioned package is intended for sale, distribution or delivery to an intermediary and is not intended for sale direct to a single consumer; or (ii) a commodity sold to an intermediary in bulk to enable such intermediary to sell, distribute or deliver such commodity to the consumer in smaller quantities; or (iii) packages containing ten or more than ten retail packages provided that the retail packages are labelled as required under the rules.”
14. Now, we turn to the order-in-original and the findings recorded therein. The Commissioner held that Rules 6 and 16 form a part of Chapter II of the said Rules and, therefore, apply to the packages intended for retail sale. The Commissioner found that the poly packs contained a declaration in terms of both Rule 6 and Rule 16. The Commissioner referred to the format of declaration to be made under Rule 29, which is a part of Chapter IV of the said Rules, which did not apply to packages intended for retail sale. The Commissioner held that Rule 29 does not require a declaration of sale price on the wholesale package. The Commissioner found that the poly pack containing 33 plus one small packages contained a declaration of the price. Therefore, the Commissioner held that the poly packs were intended for retail sale. Otherwise, there was no reason to mention MRP on the poly packs. The Commissioner held that the intention to [2024] 7 S.C.R. Commissioner of Central Excise, Jaipur -II v. M/s Miraj Products Pvt. Ltd. make retail sale of the poly packs was clear, and, therefore, whether poly packs were sold by way of retail sale was irrelevant.
15. As noted earlier, in view of sub-section (1) of Section 4A, the question is whether there is any requirement in the said Rules to declare the retail sale price of the commodity on the package. What is relevant is whether the package is of such nature that attracts any of the provisions of the said Rules, which mandatorily require the mention of retail price on the package. In case of a package that does not attract provisions of the said Rules regarding mentioning the retail price, even if the retail price is mentioned on the package, that itself will not attract sub-section (1) of Section 4A of the Excise Act.
16. However, on facts, we may not be required to deal with the issue of whether a poly pack containing 33 plus one small package was intended for retail sale. The reason is that the specific case made out by the respondent in reply to the show cause notices was that the respondent was selling HDPE bags containing 100 poly packs containing 33 plus one smaller pack has not been rejected by the Commissioner. In fact, the Commissioner seems to have accepted the contention, as seen from Clause (d) of paragraph 16 of the order- in-original. In clause (d), the Commissioner held thus: “(d) Further the intentions of the assessee that HDPE bag is a wholesale package and the larger polypack packages are group packages intended for retail sale is also expressed from the fact that there is no requirement under Rule 29 of the Standards of Weights & Measures (Packaged Commodities), Rules, 1977 of mentioning sale price or unit sale price or the MRP on a wholesale package whereas their larger polypack package contains the declaration “MAX UNIT SALE PRICE” and they are not declaring sale price on HDPE bag (it has also been admitted by them in the reply to Show Cause Notice that their HDPE bag is a wholesale package), therefore, this larger polypack package containing the declaration “MAX UNIT SALE PRICE” cannot be considered as a wholesale package but can be considered only a group package intended for retail sale. Only the HDPE bag of the assessee, which contains 100 larger polypack packages and 126 does not contain declaration of sale price, would be a wholesale package.” (emphasis added)
17. In so many words, the Commissioner held that an HDPE bag containing 100 poly packs does not contain a declaration of selling price and therefore, it would be a wholesale package. There is no finding recorded that what is distributed or sold by the respondent is a poly pack containing 33 plus one small pack. The respondent’s case that 100 poly pack packages are being put in one HDPE bag has been accepted by the Commissioner. Therefore, the respondent is selling HDPE bags containing 100 poly packs each to the distributors and dealers. The said Rules do not require the display of price on such HDPE bags. Even assuming that 100 poly packs were retail packages, HDPE bags would be covered by the definition of ‘wholesale package’ as defined in clause (iii) of Rule 2(x) of the said Rules. Thus, the HDPE bags are not group packages within the meaning of Rule 2(g).
18. Though the impugned judgment is not satisfactorily worded, for the reasons which were recorded above, the ultimate conclusion recorded in the impugned judgment that Section 4A(1) of the Excise Act was not applicable to the goods subject matter of the show cause notices, cannot be faulted with. Hence, there is no reason to interfere with the impugned judgment.
19. Accordingly, the appeals are dismissed with no order as to costs. Result of the case: Appeals dismissed. †Headnotes prepared by: Divya Pandey