1. M/s. Tata Engineering Locomotive
Co. Ltd., Sales Office, Centre 1,
26th Floor, World Trade Centre,
Mumbai – 400 005.
2. Sakti Automobiles
Opposite of Telecom Office,
Edappally Toll Junction,
Kochi-682 024. .. Petitioners
Proprietor, Pulimoottil Enterprises,
Kottayam .. Respondent
HON’BLE MR. JUSTICE M.B.SHAH, PRESIDENT.
MRS. RAJYALAKSHMI RAO, MEMBER
For the Petitioners : Mr. Aditya Narain, Advocate
For the Respondent :
Ms. Tessy Paul, Advocates
M.B.SHAH, J. PRESIDENT
The only question involved in this Revision Petition is - In a case where Excise Duty payable under the Excise Act, is not paid by the manufacturer or the dealer, are they entitled to recover it from the customer/consumer?
Obvious answer is that they cannot demand such Excise Duty on the assumption that on the date when the vehicle was handed-over to the complainant, there was increase in the Excise Duty.
Further, such demand or collection of excise duty not payable by the manufacturer or the dealer is illegal and would be apparently unfair trade practice.
in this case, the complainant booked a Tata Sumo Car
through its dealer, Respondent No.1, namely, Shakti Automoblies,
order, the Complainant filed appeal No.785/1997 before the State Commission, Kerala, against the
dealer i.e. Sakthi Automobiles and the manufacturers,
i.e. the General Manager, Vehicle, Marketing, Tata
Engineering & Locomotive Company Ltd. (TELCO). The State Commission, during
the course of hearing, directed the Petitioners to furnish relevant information
as to when the vehicle was released exactly from the factory. Despite two
adjournments, the required material was not produced. Hence, the State
Commission held that it was the obligation of the Petitioners to convince that
the vehicle was released from the factory after Tariff Amendment Act came into
force, and, as they have failed to produce the same, despite two adjournments,
the State Commission directed the Petitioner to refund the amount of
Rs.38,344/- which was wrongly recovered as excise duty from the Complainant,
with interest at the rate of 12% pa. from
Against that order of the State Commission, the dealer and the manufacturer (TELCO) have preferred this Revision Petition.
At the time of admission, this Commission vide order dated 28.11.2005, directed the petitioners to file an affidavit to the effect that on which date the vehicle supplied to the complainant was released from the factory. The reason being the date of payment of Excise Duty would be the date of release of vehicle from the factory. Repeated adjournments were given for the purpose.
At the time of hearing, the learned counsel, Mr. Aditya Narain, stated that the vehicle was released prior to the increase in Excise Duty. Still, however, he argued the matter with all vehemence. He contended that the Complainant was required to pay increase in excise duty to the dealer who had delivered the vehicle after increase of such excise duty.
In our view, such a demand is, on the face of it, an ‘unfair trade practice’ by the Petitioners, namely the TELCO and its Dealer. Reason being, once the excise duty is not paid by the manufacturer or the dealer, there is no reasonable or valid purpose in recovering the same from the consumer. Section 12A of the Central Excise Act, 1944, specifically provides that notwithstanding anything contained in the Act or any other law for the time being in force, every person who is liable to pay duty of excise on any goods shall, at the time of clearance of the goods, prominently indicate in all the documents relating to assessment, sales invoice, and other like documents, the amount of such duty which will form part of the price at which such goods are to be sold. Hence, whatever amount was paid as excise duty at the time of clearance of the goods becomes part of the price at which such goods are to be sold.
Further, Section 12C of the Excise Act provides that if the excise duty is wrongly or erroneously recovered even by the Central Excise Department, it is required to be refunded and deposited in a fund which is called Consumer Welfare Fund. Hence, if the excise duty is not payable, it cannot be retained either by the manufacturer, dealer or even the Excise Department.
Further, if the manufacturer recovers such unpayable excise duty, it would be unfair trade practice. Section 2(1)(r)(ix) of the Consumer Protection Act, 1986, specifically provides that unfair method or deceptive practice would include the practice of making any statement which materially misleads the public concerning the price at which a product have been or are, ordinarily sold.
Despite the above clear legal position, learned Counsel Mr. Aditya Narain, further submitted that Section 2(1)(c)(iv) which was in force at relevant time, provided that a complaint can be filed if the trader has charged, for the goods mentioned in the complaint, a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods, and therefore the present, complaint was not maintainable as there is no law fixing the price.
For appreciating this contention, we would refer to Clause 2(1)(c)(i), which is as under:
“ ‘Complaint’ means any allegation in writing made by a Complainant that –
(i) an unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider.”
(iv.) A trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods (Clause which was in force at the relevant time).
Section 2(1)(c)(i) of the Consumer Protection Act provides that the complaint is maintainable in case where the trader has adopted unfair trade practice or restrictive trade practice. In the present case it is apparent that the Petitioners have charged the price in excess of the price, by falsely stating that it was an excise duty payable by the consumer. Excise duty is fixed under the law and not by the agreement of the parties. Therefore, this contention is also without any substance. Petitioners were entitled to recover the excise duty which they have paid at the time of release of the vehicle from the factory. Thereafter, there was no question of paying any amount as excise duty under the law.
Further, even if we take into consideration Section 2(1)(c)(iv) which was applicable at the relevant time, then also complaint is maintainable. The excise duty which becomes part of the sale price is required to be prominently indicated in the sales invoice and such other documents, as provided in Section 12C of the Excise Act, which becomes part of the price at which such vehicle is sold. Therefore, charging of the excess excise duty which is fixed under the law is covered by Section (2)(1)(c)(iv) of the Consumer Protection Act, and on this ground the complaint is maintainable.
It would be worthwhile to quote the decision of the Apex Court in Om Prakash Vs. Assistant Engineer, Haryana Agro Industries Corporation Ltd. & Anr., (1294), wherein the Court considered the provisions of Section 36-A of the M.R.T.P. Act, and held as under:
“But after the introduction of the aforesaid amendment, which provides that the ‘unfair trade practice’, shall cover any unfair method or unfair or deceptive practice adopted by a trader vis-a-vis the consumer, the conduct and practice intentionally adopted by the respondent, in not making delivery of the tractor to the appellant, shall certainly be deemed to be an ‘unfair trade practice’ within the meaning of Section 36-A. It cannot be disputed that if a trader intentionally delays the delivery of any goods to the consumer, because of which the consumer suffers, it shall amount to an unfair method or unfair practice adopted by the trader. As such after the introduction of the amendment by the Act No. 58 of 1991 in Section 36-A, there should not be any difficulty in holding that because of the unfair trade practice adopted by the respondent, the appellant has suffered a loss and damage, within the meaning of Section 2(1)(c)(i) of the Consumer Protection Act, in respect of which he can file a complaint. The National Commission has pointed out that in the agreement, it had been stipulated that appellant shall pay the price prevailing at the time of the delivery. According to us, it is not of much consequence, once it is established that respondent intentionally postponed the delivery of the tractor to the appellant, although he was not only entitled to the delivery much earlier but, according to the findings of the District Forum and the State Commission, he was throughout willing to take delivery of the tractor according to the list of booking.”
In this view, it is not necessary to discuss the judgment sought to be relied upon by the Petitioners and this Revision Petition requires to be dismissed.
Next, questions are:
(a) Whether it is a fit case for giving directions as provided in Section 14(f) of the Act?
In our view, apparently, this is a fit case for issuing a direction to the TELCO which is a big company and its dealer to discontinue such an unfair trade practice and not to repeat the same in future, and also to direct its dealers not to adopt it in future.
(b) Further, whether it is a fit case for imposition punitive damages?
As nothing has been brought on record that the Petitioners have adopted such practice in a number of cases, we do not impose punitive damages. However, as Petitioners, without any justifiable reasons recovered the amount as excise duty and continued the litigation for years together this is a fit case for directing the Petitioners to pay adequate costs. Considering the over all facts, we fix the costs at Rs.25,000/- payable to the Complainant.
In the result, (i) the order passed by the State Commission directing the Petitioners to refund the amount of Rs.38,344/- with interest at the rate of 12% p.a. from 30.9.1996 till the date of payment, is maintained;
(ii) the Petitioners are directed to discontinue the unfair trade practice mentioned above and not to recover any excise duty or other duties not payable by the consumer; and,
(iii) the Petitioners shall pay Rs.25,000/- as costs to the Complainant within a period of four weeks from today.
The petition stands disposed of accordingly.