In APPEAL NO.1478/2011-KAR SCDRC-Manufacturers not permitted to mark different MRPs for same quantity and quality of goods: Karnataka Consumer Commission Justices Huluvadi G Ramesh, K.B. Sangannanavar & Member-M. Divyashree [07-02-2022]

Read Order: M/s PepsiCo India Holdings Pvt. Ltd. & Ors v. Sri. Adithya Banavar & Ors 

Tulip Kanth

Bangalore, April 11, 2022: Referring to Section-4A of the Central Excise Act which deals with valuation of excisable goods with reference to retail sale price, the Karnataka State Consumer Disputes Redressal Commission has recently clarified that the said provision cannot in any manner permit manufacturers to mark different MRPs for the same quantity and quality of goods. 

The factual background of this case was such that the complainants went to Mantri Mall and purchased one litre water bottle of Aquafina, a 330 ml Pepsi Tin and 350 ml bottle of Nimbooz, for which they were charged Rs.20, Rs.50 and Rs.50 respectively in Palatte Mantri Square(first Opposite Party) whereas the costs for the same items were Rs.15 , Rs.25 and Rs.15, in Food World Super Market.

It was the case of the complainants that the MRP at the Palatte Mantri Square for these things were different from the MRP marked on the identical products at Food World. There was no warning either on the product or separate warning on the bill that certain identical products were available at much cheaper rate at other retail shops, which amounted to deficiency in service and unfair trade practice. It was alleged by the complainants that such variations had been done at the manufacturer’s level. 

The Opposite Parties (OPs) contended that, there was no legal impediment for providing different MRPs for the same commodity and fixation of different MRPs on the same packaged commodity is even provided under the Section-4A of the Central Excise Act, 1944. 

After enquiry, the District Commission recorded affirmative finding in favor of complainants and directed OPs to stop printing different MRPs to the same quantity water bottles, Pepsi Cans or bottles and Nimbooz bottles of the same quantity and print only one MRP for all the things of equal quantities, apart from directing OPs to submit compliance report before the District Commission and awarding Rs.5,000  compensation and Rs.2,000 litigation costs. Aggrieved by such order, this appeal was filed by the OPs before the Karnataka State Consumer Disputes Redressal Commission, Bangalore.

The OPs contended that the sale made at the premises of a beverage restaurant outlet in the food court area is not a ‘retail sale’, but an ‘institutional sale’ to the service industry. It was submitted that  though there is a prohibition under Standards of Weights and Measures Act that one cannot sell packaged commodity over and above the MRP declared on the said packaged commodity, but they have paid the excise duty as contemplated under section-4A of the Central Excise Act on the commodities in question.

The Respondents/complainants in their written arguments contended that, the Central Excise Act, 1944 cannot in any manner govern unfair trade practice and does not permit manufacturers to mark different MRPs for the same quantity and quality of goods, nor does it make it legal. One of the main contentions of the complainants was that while the outlet ‘Pepsi’ in the Food Court ‘Palette’ may be an institutional consumer, when they resell it to others over a counter, the sale becomes a retail sale and therefore the Legal Metrology (Packaged Commodities) Rules, 2011 would be applicable to the appellants herein. 

The important issue before the Commission was whether appellants/OPs are at liberty to print different MRPs as per Section-4A of Central Excise Act.

Referring to Section-4A the Bench of Justice Huluvadi G Ramesh, Justice K.B. Sangannanavar and Member-M. Divyashree said, “…it is clear that the said provision cannot in any manner permit manufacturers to mark different MRPs for the same quantity and quality of goods. No doubt it only governs what would be the price on which excise duty would be calculated should there be different retail prices marked, dependant on different geographical areas.”

The Commission was of the firm view that though the appellants-OPs contended that, they had paid the excise duty as contemplated u/s-4A of the Central Excise Act on the commodities in question, but they utterly failed to prove the same with cogent and reliable evidence.

The appellants/OPs cannot go beyond the provisions contemplated under the Standard of Weights and Measures Act, 1976 and Legal Metrology (Packaged Commodities) Rules, 2011, under the guise of Central Excise Act, 1944, that too, in the absence of there being any acceptable evidence regarding whether the sale was retail sale or institutional sale and whether they had paid any excise duty to the concerned regarding the products, added the Commission.

Thus, finding no error/omission in the order passed by the District Forum, the appeal was dismissed with cost of Rs 10,000 to be payable to Respondents.