State Consumer Disputes Redressal Commission
Pizza Hut Devyani International Ltd. vs Raghubir Singh on 25 August, 2023
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
First Appeal No.177 of 2022
Date of Institution : 08.03.2022
Date of Reserve : 18.07.2023
Date of Decision : 25.08.2023
Pizza Hut, Devyani International Ltd., SCO-10, Phase-5, Mohali,
(through its Incharge/MD/Manager)
(As mentioned in the complaint)
Devyani International Limited, having it corporate office at Plot
No.18, Sector-35, Gurgaon, Haryana-122004 through its
Authorized Representative Sh.Munish Bhatnagar.
....Appellant/Opposite party
Versus
Raghubir Singh S/o Sh.Bhajan Singh R/o #353, Sector 71, Mohali.
.....Respondent/complainant
First Appeal under Section 41 of the Consumer
Protection Act, 2019 against the order dated
04.01.2022 of the District Consumer Disputes
Redressal Commission, SAS Nagar (Mohali).
Quorum:-
Mr.Harinderpal Singh Mahal, Presiding Judicial Member
Present:-
For the appellant : Sh.Devinder Kumar, Advocate For the respondent : Sh.Manoj Vashishtha, Advocate for Sh.Kulwinder Singh, Advocate HARINDERPAL SINGH MAHAL, PRESIDING JUDICIAL MEMBER This appeal has been preferred by the appellant/opposite party-Pizza Hut; against the order dated 04.01.2022 passed by District Consumer Disputes Redressal Commission, SAS Nagar, Mohali (in short, "the District Commission"), whereby the complaint filed by the complainant under the Consumer Protection Act (in First Appeal No 177 of 2022 2 short 'the Act') was allowed and opposite party was directed to pay the consolidated compensation of Rs.10,000/- for causing mental agony and harassment. The opposite party was further directed to pay punitive damages to the tune of Rs.2,00,000/- and deposit the same in the Legal Aid Account of this Commission.
It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
2. In brief the facts of the complaint are that the opposite party is running the business under the name and style of 'Pizza Hut', a unit of Devyani International Ltd. On 31.10.2017, the complainant along with his friend visited opposite party and purchased one Pepsi PET bottle along with one Double Cheese PAN-MED Pizza from opposite party, who issued an invoice of Rs.290/-, vide which a sum of Rs.60/- was charged for a Pepsi PET bottle, which was available @Rs.35/- MRP. The price of the bottle in the invoice has been shown as Rs.60/- inclusive of GST. When the complainant objected to it, the opposite party informed that he has to pay Rs.60/- and if he do not want to take the bottle from them he can buy from some other shop. The complainant then purchased a Pepsi Bottle by paying Rs.35/- from Singla General & Provision Store, vide bill No.267 dated 01.11.2017. It is further averred that as per various judgments the opposite party cannot charge different MRPs for the same product in the market at the same time. This act and conduct of the opposite party amounts to unfair First Appeal No 177 of 2022 3 trade practice resulting filing of the present complaint before the District Commission and seeking following reliefs:
i) to refund Rs.25/- charged extra on Pepsi bottle.
ii) to pay Rs.70,000/- as unfair trade practice; and
iii) to pay Rs.25,000/- toward the proceeding of the case.
3. Upon notice, opposite party appeared and filed its written statement and submitted that the complaint filed by the complainant is an abuse of process of law and is not maintainable as the complainant suppressed the material facts. The averments made in the complaint are vague, baseless and with malafide intention. The complaint has been filed by the opposite party only with the ulterior motive to harass the opposite party. It is further submitted that the opposite party sells the products which are procured directly from the manufacturers and bear an MRP printed on the said product. The different MRP is printed on the products which are made available for sale by the opposite party only at its outlet and no such product is made available by the opposite party for sale in open market. Further, submitted that commodities meant for two different markets and customers, whereas one labeled as "For Sale at Select Channels" is meant for customers in specific restaurants with all amenities and facilities being available to them. While a bottle of Pepsi which is sold at a shop in retail sale with no inking of any service attached to it. Accordingly, there is a reasonable classification as to why a bottle sold at Select Channel is priced differently than the one purchased from an ordinary shop. In the absence of any law prohibiting the differential pricing- a First Appeal No 177 of 2022 4 trader/ manufacturer is free to fix the different MRPs even for the same product. It is a common practice all over the world and declaration of dual MRP is legally permissible. On merits, all the averments as averred by the complainant in his complaint were denied and it is submitted that opposite party has committed no unfair trade practice and prayed for dismissal of the complainant.
4. The parties led their evidences in support of their respective contentions before the District Commission and after hearing the parties, the complaint was allowed, vide impugned order dated 04.01.2022.
5. Aggrieved by the said order, this appeal has been filed by the appellant/opposite party for setting aside the impugned order dated 04.01.2022 and to allow the appeal.
6. I have heard the contentions of the parties and have carefully gone through the record as well as written arguments filed by the parties. I have also given my thoughtful consideration to the same.
7. Learned counsel for the appellant submitted the written arguments as well as oral submissions. Orally, he laid much emphasis on Section 4 of the Central Excise Act, which provides for valuation of the excisable goods with reference to retail sale price and under this provision different retail sale price of different package is provided and such trade practice cannot be termed as unfair trade practice as observed by the District Commission. He further submitted that as per Section 3 of the Central Excise Act, the Government has empowered to fix different tariff values of the First Appeal No 177 of 2022 5 same excisable goods sold to different classes of buyers. Therefore, the fixation of different MRP for the same product but sold to different classes of buyers is clearly permissible under the law, as such, variation of MRP is as per Section 4A of the Excise Act and the opposite party has paid the excise duty as contemplated under Section 4A of the Central Excise Act.
8. He further averred that the case of the respondent/ complainant does not fall under the restrictive trade practice as there is no manipulation of prices and it was a case of different MRP which are printed 'for sale at selected channels' and the District Commission has failed to consider all this regarding dual pricing for identical goods. He further submitted that the appellants have not concealed any fact from the respondent/complainant. The manufacturers are free to fix different MRPs for a bottle of soft drink depending on various factors. He relied upon the following authorities:
i) First Appeal No.299 of 2014 titled Hindustan Cola Beverage Pvt. Ltd. Vs. Sidharth Manchanda (State Commission, Uttrakhand).
ii) Appeal No.01/2015, Multiplex Cinevision Pvt. Ltd.
Sidharth Manchanda.
9. Per contra, learned counsel for the respondent/ complainant alleged that though the appellant/opposite party argued that the goods which were sold to the respondent/complainant was for some selected channels but the case set up by the appellant/opposite party is totally baseless because the First Appeal No 177 of 2022 6 respondent/complainant has not used the value-added services of the ambience, air conditioning services, chair, table nor claiming that the manufacturer overcharged from him by making the higher Maximum Retail Price of a cold drink bottle and the District Commission has rightly held that it was over pricing of the same product by the appellant/opposite party.
10. Since the appellant/opposite party has taken the shelter of Section 3 & 4A of the Central Excise Act so before proceeding, it is important to have a look into the same, which is reproduced as under:
"3. Duties specified in the Schedule to the Central Excise Tariff Act, 1985 to be levied.--
(1) 1 [There shall be levied and collected in such manner as may be prescribed,--
(a) 2 [a duty of excise, to be called the Central Value Added Tax (CENVAT)] on all excisable goods 3 [(excluding goods produced or manufactured in special economic zones)]* which are produced or manufactured in India as,] and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); tc" (a) 1[a duty of excise, to be called the Central Value Added Tax (CENVAT)] on all excisable goods 2[(excluding goods produced or manufactured in special economic zones)]* which are produced or manufactured in India as,] and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);"
(b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods 3 [(excluding goods produced or manufactured in special economic zones)]* specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are First Appeal No 177 of 2022 7 produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule:] tc" (b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods 2[(excluding goods produced or manufactured in special economic zones)]* specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule\:]" 4 [Provided that the duties of excise which shall be levied and collected on any 5[excisable goods which are produced or manufactured,-- 6 [***]
(ii) by a hundred per cent export oriented undertaking and 7 [brought to any other place in India], tc" (ii) by a hundred per cent export oriented undertaking and 6[brought to any other place in India]," shall be an amount equal to] the aggregate of the duties of customs which would be leviable 8 [under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force] on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 (51 of 1975). tc "shall be an amount equal to] the aggregate of the duties of customs which would be leviable 7[under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force] on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 (51 First Appeal No 177 of 2022 8 of 1975)." 9 [Explanation 1.--Where in respect of any such like goods, any duty of customs leviable for the time being in force is leviable at different rates, then, such duty shall, for the purposes of this proviso, be deemed to be leviable at the highest of those rates.] 10 [Explanation 2.--In this proviso,-- 11
[***] 11 [***]
(ii) "hundred per cent export-oriented undertaking" means an undertaking which has been approved as a hundred per cent. export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act.]] tc" (ii) "hundred per cent export-oriented undertaking" means an undertaking which has been approved as a hundred per cent. export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act.]]" 12
[(iii) "Special Economic Zone" has the meaning assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).] 13 [(1A) The provisions of sub-section (1) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by, or on behalf of, Government, as they apply in respect of goods which are not produced or manufactured by Government.] (2) The Central Government may, by notification in the Official Gazette, fix, for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in 14 [the First Schedule and the Second Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986)] as chargeable with duty ad valorem and may alter any tariff values for the time being in force.First Appeal No 177 of 2022 9
[(3) Different tariff values may be fixed--
(a) for different classes or descriptions of the same excisable goods; or tc" (a) for different classes or descriptions of the same excisable goods; or"
(b) for excisable goods of the same class or description-- tc"
(b) for excisable goods of the same class or description--"
(i) produced or manufactured by different classes of producers or manufacturers; or tc" (i) produced or manufactured by different classes of producers or manufacturers; or"
(ii) sold to different classes of buyers: tc" (ii) sold to different classes of buyers\:" Provided that in fixing different tariff values in respect of excisable goods falling under sub-clause
(i) or sub-clause (ii), regard shall be had to the sale prices charged by the different classes of producers or manufacturers or, as the case may be, the normal practice of the wholesale trade in such goods.] [4A. Valuation of excisable goods with reference to retail sale price.--
(1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply.
(2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of First Appeal No 177 of 2022 10 abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette.
(3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods. 2[(4) Where any goods specified under sub-section (1) are excisable goods and the manufacturer--
(a) removes such goods from the place of manufacture, without declaring the retail sale price of such goods on the packages or declares a retail sale price which is not the retail sale price as required to be declared under the provisions of the Act, rules or other law as referred to in sub-section (1); or
(b) tampers with, obliterates or alters the retail sale price declared on the package of such goods after their removal from the place of manufacture, then, such goods shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price for the purposes of this section. Explanation 1.--For the purposes of this section, "retail sale price" means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like and the price is the sole consideration for such sale: Provided that in case the provisions of the Act, rules or other law as referred to in sub-section (1) require to declare on the package, the retail sale price excluding any taxes, local or otherwise, the retail sale price shall be construed accordingly. Explanation 2.--For the purposes of this section,--First Appeal No 177 of 2022 11
(a) where on the package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale prices shall be deemed to be the retail sale price;
(b) where the retail sale price, declared on the package of any excisable goods at the time of its clearance from the place of manufacture, is altered to increase the retail sale price, such altered retail sale price shall be deemed to be the retail sale price;
(c) where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail sale price shall be the retail sale price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates.]]"
11. The careful perusal of Section 4A reveals that it does not relates to the retail printing of retail prices and goods by the manufacturer but it only relates to the excise duty on the items, where the retail prices and declared as different on different packaged goods. Whereas in the present case, I have to deal with the fact that if charging of different retail prices of the same packaged goods is admissible under the law or not? It has been dealt by The Legal Metrology (Packaged Commodities) Rules, 2011 and as there is amendment of this Act under Notification dated 23.06.2017, which envisaged as under:
"2(m) "retail sale price" means the maximum price at which the commodity in packaged form may be sold to the consumer inclusive of all taxes;"
After Rule 2 following schedule 2A is as under:
"(2A) Unless otherwise specially provided under any other law, no manufacturer or packer or importer shall declare First Appeal No 177 of 2022 12 different maximum retail prices on an identical pre-packaged commodity by adopting restrictive trade practices or unfair trade practices as defined under clause (c) of sub-section (1) of section 2 of the Consumer Protection Act, 1986."
12. This amendment clearly bars the manufacturer or retailer to declare different maximum retail prices of an identical pre- packaged commodity. This nullifies the arguments advanced by learned counsel for the appellant/opposite party that there is no bar under law to mention the different retail prices for some selected channels/sale outlets. The appellant/opposite party has also relied upon the following authorities:
i) Civil Appeal No.21790 of 2017 titled Federation of Hotel and Restaurant Association of India Vs. Union of India (SC).
ii) 2005 (2) SCC 227 titled Pallavi Refractories & Ors. Vs. Singareni Collieries Co. Ltd.
iii) First Appeal No.299 of 2014 titled Hindustan Cola
Beverage Pvt. Ltd. Vs. Sidharth Manchanda.
(Uttrakhand State Commission)
13. The authorities only relates to the fact that where the services are rendered to the consumers in the premises of the hotels or restaurants. The Hon'ble Supreme Court has already clarified this issue in its judgment reported (1972) 1 SCC 472 titled State of Punjab Vs. M/s Associated Hotels of India Ltd. In this case, no service has been provided to the respondent/complainant by the appellant/opposite party and for that purpose, the place of the appellant/opposite party cannot be declared as hotel or restaurant. No service was provided to the respondent/complainant by the appellant/opposite party rather it appears to be self-service First Appeal No 177 of 2022 13 outlet. It is important to mention here that the respondent/ complainant has not even used their ambience, air-conditioning facility etc. as it is cleared from Invoice Ex.C-2, wherein it has been clearly mentioned that the order was booked as 'TAKEAWAY' and not 'DINE IN'. Moreover, their outlet as a restaurant or hotel has to obtain a license under the FSSA 2006, which is a food safety and regulation in India.
14. Section 2(n) of the FSSA 2006 defines the term 'food business' as any undertaking, whether for profit or not and whether public or private, carrying out any of the activities related to any stage of manufacture, processing, packaging, storage, transportation, distribution of food, import and includes food services, catering services, sale of food or food ingredients.
15. Under the Food Safety and Standards (Licensing and Registration of Food Businesses), Regulations, 2011 (in short the Regulations), 'Petty Food Manufacturer" has been defined as under:-
a. manufactures or sells any article of food himself or a petty retailer, hawker, itinerant vendor or temporary stall holder; or distributes foods including in any religious or social gathering except a caterer; or such other food businesses including small scale or cottage or such other industries relating to food business or tiny food businesses with an annual turnover not exceeding Rs 12 lakhs and/or whose -
b. production capacity of food (other than milk and milk products and meat and meat products) does not exceed 100 kg/ltr per day or First Appeal No 177 of 2022 14 c. procurement or handling and collection of milk is up to 500 litres of milk per day or slaughtering capacity is 2 large animals or 10 small animals or 50 poultry birds per day or less."
Regulation 2.1 (Chapter 2) of the said Regulations provides that all the Food Business Operators in the country will be registered or licensed in accordance with the procedures provided under this regulation, which makes it mandatory for the outlets running the food business to procure the license under the said Act. It has been specifically provided under Section 3 of the FSSA 2006 that any person desirous to commence or carry on any food business then firstly he shall make an application for grant of license to the designated officer in such manner containing such particulars and fees as may be specified under the regulations.
"2.1.1 Registration of Petty Food Business (1) Every petty Food Business Operators shall register themselves with the Registering Authority by submitting an application for registration in Form A under Schedule 2 of these Regulations along with a fee as provided in Schedule 3.
(2) The petty food manufacturer shall follow the basic hygiene and safety requirements provided in Part I of Schedule 4 of these Regulations and provide a self attested declaration of adherence to these requirements with the application in the format provided in Annexure-1 under Schedule 2. (3) The Registering Authority shall consider the application and may either grant registration or reject it with reasons to be recorded in writing or issue notice for inspection, within 7 days of receipt of an application for registration. (4) In the event of an inspection being ordered, the registration shall be granted by the Registering Authority after First Appeal No 177 of 2022 15 being satisfied with the safety, hygiene and sanitary conditions of the premises as contained in Part I of Schedule 4 within a period of 30 days.
If registration is not granted, or denied, or inspection not ordered within 7 days as provided in above sub regulation (3) or no decision is communicated within 30 days as provided in above sub regulation (4), the petty food manufacturer may start its business, provided that it will be incumbent on the Food Business Operator to comply with any improvement suggested by the Registering Authority even later. PROVIDED that registration shall not be refused without giving the applicant an opportunity of being heard and for reasons to be recorded in writing.
(5) The Registering Authority shall issue a registration certificate and a photo identity card, which shall be displayed at a prominent place at all times within the premises or vehicle or cart or any other place where the person carries on sale/manufacture of food in case of Petty Food Business. (6) The Registering Authority or any officer or agency specifically authorized for this purpose shall carry out food safety inspection of the registered establishments at least once in a year.
PROVIDED that a producer of milk who is a registered member of a dairy Cooperative Society registered under Co- operative Societies Act and supplies or sells the entire milk to the Society shall be exempted from this provision for registration.
16. In the present case, the appellant/opposite party has not placed on record any license obtained by them under FSSA 2006, showing thereby that such food business is run by them is illegal and in unauthorized manner enabling them to get more gains through illegal and unauthorized means. Even, under Section 18 of First Appeal No 177 of 2022 16 the Legal Metrology Act, 2009, it has been specifically provided that no retail outlet shall manufacture, pack, sell, import, deliver, offer, expose or possess for sale any pre-packaged commodity unless such package is in such standard quantities or number and bears thereon such declarations and particulars in such manner as may be prescribed.
17. As provided under this Rule, the appellant/opposite party has no right to sell any commodity including the bottle, in question, at a price exceeding the retail price thereof. The retail sale price has been further defined under Rule 2(m) of Legal Metrology (Packaged Commodities) Rules, 2011;
2(m) "retail sale price" means the maximum price at which the commodity in packaged form may be sold to the consumer inclusive of all taxes;
18. The conjoint reading of the Rule 2 of this and subsequent amendment, vide Notification dated 23.06.2017 clearly bars the manufacturer or retail dealer to make any sale of pre-package commodity on different prices exceeding the retail price. Even otherwise, there is no law which authorize the appellant/opposite party to charge more than the basic price under the garb of the fact that since they were providing different amenities to the consumer at their outlet which are not available in the general market. However, these rules clearly bar the appellant/opposite party to receive the amount exceeding retail price of the bottle, in question.
19. The District Commission while deciding the complaint of the complainant has rightly observed that the opposite party cannot First Appeal No 177 of 2022 17 allow such type of practice of creation of difference between the customers by these types of companies.
20. In view to the above discussions, I do not find any illegality and infirmity in the order of the District Commission. Accordingly, the appeal filed by the appellant/opposite party is hereby dismissed being devoid of merits and the order of the District Commission is upheld.
21. The appellant/opposite party had deposited a sum of Rs.25,000/- at the time of filing of the appeal. This sum, along with interest accrued thereon, if any, shall be remitted by the Registry to the District Commission, after the expiry of 45 days of the sending of certified copy of the order to them. The concerned party may approach the District Commission for the release of the above amount to the extent of his/its entitlement and the District Commission may pass the appropriate order in this regard, in accordance with law.
22. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(HARINDERPAL SINGH MAHAL) PRESIDING JUDICIAL MEMBER August 25th,2023 parmod