M/s PepsiCo India Holdings Pvt. Ltd filed an appeal with the Karnataka State Consumer Disputes Redressal Commission appealing a decision by the Additional District Consumer Disputes Redressal Forum to stop printing varied Maximum Retail Prices (MPRs) for the same amount and quality of products.
The District Forum had ordered the beverage company to set the same MRP for products of same quantity and quality, such as water bottles, Pepsi Cans, and Nimbooz bottles, and to print only one MRP for anything of identical quantity.
Allowing a complaint filed in 2011 by five students - Adithya Banavar, Abhimanyu Kampani, Aubrey Lyngdoh, Lakshmi Nair, and Ashwini Obulesh - who were then pursuing their LLB degree at the National Law School of India University (NLSIU), the forum awarded them Rs.5,000 in compensation and Rs.2,000 in litigation costs in an order dated 01.04.2011.
Case Background
The complainants went to Mantri Mall in Bengaluru in 2011 and bought a one-litre Aquafina water bottle, a 330 ml Pepsi Tin, and a 350 ml Nimbooz bottle for Rs.20, Rs.50, and Rs.50, respectively, in Palette Mantri Square (Opposite Party No.1). At a third store, Food World Super Market, the identical items were priced at Rs.15, Rs.25, and Rs.15, respectively.
The complainants claim that the MRP for these items at the O.P.No.1 differs from the MRP marked on identical products at Food World. There is no caution on the product or a separate warning on the bill that a similar product is available at a considerably lower price at other retail stores, indicating a lack of service and unfair commercial behaviour. The complainants claimed that such modifications were made at the manufacturer's level.
The opposing parties' submission
Pepsico argued that the sale made at Palette Mantri Square is a 'institutional sale' to the service industry, rather than a'retail sale.' Furthermore, it was asserted that, under Section-4A of the Central Excise Act, price fixing is the manufacturer's right.
It was also claimed that they had paid the excise duty on the articles in question as per Section-4A of the Central Excise Act.
The appeal was contested by the complainants
It was argued that labelling products with varying MRPs for different consumers misleads them about the price at which the produce is typically sold in the market. Additionally, "They (complainants) are not members of a service industry such as a hotel, airline, or train, but rather are students or customers who purchased the aforementioned things while visiting the mall. While the outlet 'Pepsi' in the Food Court 'Palette' may be an institutional consumer, when they resale it to others over a counter, the sale becomes a retail sale, and so the appellants are subject to the Legal Metrology (Packaged Commodities) Rules, 2011."
Additionally, it was said that "the Central Excise Act, 1944, cannot be used to regulate unfair trade practises and neither permits nor legalises producers from marking multiple MRPs for the same quantity and quality of goods."
Finally, it was stated, "The law governs only what price would be used to calculate excise duty if different retail prices were marked in different geographical areas, and in the present case, different MRPs are being marked in the same city, Bangalore, and have no bearing on excise duty, which amounts to unfair trade practise and deficiency in service because it materially misleads the public.
Conclusions of the Commission:
In its February 7 order, the Commission, comprised of Justices Huluvadi G Ramesh, KB Sangannanavar, and M Divyasree, referred to Section 4A of the Central Excise Act and observed "It is self-evident that the aforementioned provision cannot permit manufacturers to mark different MRPs on identical quantities and quality of goods. Without a doubt, it solely determines the price on which excise tax is computed in the event that various retail prices are indicated for distinct geographical areas."
It said, "It is critical to note here that, while the appellants/Ops maintained that they had paid the excise duty on the commodities in question as contemplated by section 4A of the Central Excise Act, they completely failed to establish the same with cogent and trustworthy evidence. The decisions upon which the appellants/Ops rely do not assist them."
Following that, it held that "the appellants/Ops cannot go beyond the provisions contemplated by the Standard of Weights and Measures Act, 1976 and the Legal Metrology (Packaged Commodities) Rules, 2011 in the name of the Central Excise Act, 1944, especially in the absence of any credible evidence regarding whether the sale was retail or institutional and whether they paid any excise duty to the concerned regarding the products."
As a result, it maintained the District Forum's ruling and dismissed the appeal with costs of Rs.10,000 to be paid by Respondents herein.
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