'Different MRPs Can't Be Fixed For Same Products' : Consumer Commission Tells PepsiCo In NLSIU Students' Complaint

Allowing a complaint made in 2011 by five students - Adithya Banavar, Abhimanyu Kampani, Aubrey Lyngdoh, Lakshmi Nair, and Ashwini Obulesh - then pursuing LLB degree at the National Law School of India University (NLSIU), the forum by its order dated 01.04.2011 had also awarded Rs.5,000 compensation and Rs.2,000 litigation costs to them.

Case Background

The complainants in 2011 went to Mantri Mall in Bengaluru and purchased one litre water bottle of Aquafina, a 330 ml Pepsi Tin and 350 ml bottle of Nimbooz, which costed them at the rate of Rs.20, Rs.50 and Rs.50, respectively in Palette Mantri Square(Opposite Party No.1). However, the same things were priced at Rs.15, Rs.25 and Rs.15, respectively at a different shop, Food World Super Market.

It is the case of the complainants that the MRP at the O.P.No.1 for these things are different from the MRP marked on the identical products at Food World. There is no warning either on the product or separate warning on the bill that a certain identical product is available at much cheaper rates at other retail shops, which amounts to deficiency in service and unfair trade practice. It was alleged by the complainants that such variations have been done at the manufacturer's level.

Submission of the opposite parties

Pepsico submitted that the sale made at the premises of the Palette Mantri Square is not a 'retail sale', but an 'institutional sale' to the service industry. Further, it was argued that the fixation of price is a prerogative of the manufacturer as per Section-4A of the Central Excise Act.

It was also said that they have paid the excise duty as contemplated under Section-4A of the Central Excise Act on the commodities in question.

Complainants opposed the appeal

It was submitted that marking different MRPs for different consumers, thereby misleading them as to the price at which the produce is ordinarily sold in the market. Further, "They (complainants) are not a service industry such as a hotel, airways, railways, etc., but are just students or customers who bought the said goods while they visited the mall. 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."

It was also said, "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."

Finally it was said, "The Law governs only what would be the price on which excise duty would be calculated should there be different retail prices marked, dependant on different geographical area and in the present case, marking of different MRPs is being done in the same city, being Bangalore, and not in different geographical area and without any relevance to excise duty, which amounts to unfair trade practice and deficiency in service as it materially misleads the public on the price at which such goods are otherwise available."

Commission's findings:

The Commission comprising Justice Huluvadi G Ramesh, KB Sangannanavar and M Divyasree, in its order dated February 7, referred to Section 4A of the Central Excise Act and observed "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, depending on different geographical areas."

It added, "It is important to note here that, though the appellants/Ops contended that, they have paid the excise duty as contemplated u/s-4A of the Central Excise Act on the commodities in question, but have utterly failed to prove the same with cogent and reliable evidence. The decisions relied upon by the appellants/Ops do not come to their help."

Following which it held, "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 have paid any excise duty to the concerned regarding the products."

Accordingly, it upheld the order passed by the District Forum and the appeal was dismissed with cost of Rs.10,000 to be payable to Respondents herein.

Case Title: M/s PepsiCo India Holdings Pvt. Ltd., others v. Adithya Banavar, others

Case No: APPEAL NO.1478/2011

Date of order: 07th DAY OF FEBRUARY, 2022

Appearance: A.Murali, J.Sagar Associates for appellants; J.Kothari Advocate for respondents

Click Here To Read/Download Order