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        Case ID :

        2006 (5) TMI 483 - HC - FEMA

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        Packaged commodity rules do not cover sunglasses sold on open display with protective cases only. The relevant provisions of the Standards of Weights and Measures regime applied to packaged commodities once the statutory provisions had been notified; a ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                            Packaged commodity rules do not cover sunglasses sold on open display with protective cases only.

                            The relevant provisions of the Standards of Weights and Measures regime applied to packaged commodities once the statutory provisions had been notified; a separate notification for each commodity was not required where the scheme otherwise covered that class. However, sun glasses sold on open display and chosen by customers were not pre-packed commodities merely because they were kept in a case or pouch for protection or convenience. A package is covered only where it is integral to sale and the contents have a predetermined value that changes only on opening or perceptible modification. On those facts, the seizure and compounding action lacked authority under the statutory scheme.




                            Issues: (i) Whether the provisions of the Standards of Weights and Measures Act, 1976, the Standards of Weights and Measures (Enforcement) Act, 1985 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 applied to sun glasses in the absence of a specific notification; (ii) Whether sun glasses, as sold in the facts of the case, were pre-packed commodities within the meaning of the Rules.

                            Issue (i): Whether the provisions of the Standards of Weights and Measures Act, 1976, the Standards of Weights and Measures (Enforcement) Act, 1985 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 applied to sun glasses in the absence of a specific notification.

                            Analysis: The Act had been brought into force in respect of the relevant provisions by notification, including the provisions relating to packaged commodities. Once the relevant provisions were notified and the Rules were framed for packaged commodities, there was no requirement of a separate notification for each class of goods where the statutory scheme otherwise applied. The provisions governing pre-packed commodities applied to all commodities falling within that class.

                            Conclusion: The contention that the Act, the Enforcement Act and the Rules were inapplicable for want of a separate notification for sun glasses was rejected.

                            Issue (ii): Whether sun glasses, as sold in the facts of the case, were pre-packed commodities within the meaning of the Rules.

                            Analysis: A pre-packed commodity is one placed in a package of whatever nature so that the quantity or contents have a predetermined value and cannot be altered without opening the package or causing a perceptible modification. On the facts found, the sun glasses were kept on open display, were handled and chosen by customers, and any case or pouch was used only for protection or convenience. Their value did not change on opening, and the package was not integral to sale in the manner contemplated by the Rules. The explanation regarding testing did not apply, because the goods were not tested as packaged commodities in the relevant sense.

                            Conclusion: Sun glasses in the circumstances of the case were not pre-packed commodities and the impugned action was without authority of law.

                            Final Conclusion: The seizure and compounding action could not be sustained under the statutory scheme, and the writ petition succeeded.

                            Ratio Decidendi: Goods kept in packaging merely for protection, safety or convenience do not become pre-packed commodities unless the package itself is integral to sale and the contents have a predetermined value that is altered only by opening the package or causing a perceptible modification.


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                            ActsIncome Tax
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