SAEED-UZ-ZAMAN SIDDIQUI, J.--1. This constitutional petition is filed by the petitioner to challenge the orders of respondents No. 1 to 3 dated 27th September, 1983, 23rd April, 1984 and 31st July, 1984 respectively. The following are the brief facts of the case:
2. The petitioner is a public limited company which is engaged in the manufacture of cigarettes.
The petitioner has been marketing their cigarettes under the brand name "Melbum". On 6th February, 1983 the petitioner informed the Superintendent, Central Excise (Land Customs), Karachi, that they intend to introduce their running brand of 'Melbum' cigarettes in soft packing of 20 cigarettes and they also forwarded the specimen of soft packing and label as required under the rules. In the said letter the petitioner also intimated the Authorities, that the retail price of the 'Melbum' cigarettes packed in soft packing will be Rs. 4.40 excluding the octroi. It may be mentioned here that the petitioner was already marketing 'Melbum' cigarettes in crush proof packing and the retail price of 20 cigarettes in such packing was fixed at Rs. 4.50 From 7th February, 1983 the petitioner started marketing 'Melbum' cigarettes in soft packing with retail price of Rs. 4.40 and the stock of these cigarettes was allowed to be cleared under Supervised Clearance Procedure against Form No. AR- 1. It appears that in or about July, 1983 the Intelligence Staff of Central Excise and Land Customs made enquiries against the petitioner and reached the conclusion that they were evading a portion of central excise duty payable on 'Melbum' brand of cigarettes by fixing a lower retail price and has thus evaded a sum of Rs. 3,57,127.00, on account of central excise duty between the period from 6th February, 1983 to 9th July, 1983. The above amount of Rs. 3,57,127.00 was calculated on the basis of higher retail price of 'Melbum' cigarettes sold by the petitioner in crush proof packing. Respondent No. 1 accordingly by his order dated 27th September, 1983 directed the petitioner to pay a sum of Rs. 3,57,127.00 on account of evaded excise duty. The petitioner challenged the above order of respondent No. 1 before respondent No. 2 unsuccessfully.
The petitioner finally filed a revision application before respondent No. 3 which too was dismissed by order dated 31st July, 1984. The petitioner, thereafter, filed the present petition.
3. The learned counsel for the petitioner contended before us that the view taken by respondents No. 1 to 3 that the petitioner had fixed two retail prices for the same brand or variety of the cigarettes is based on erroneous interpretation of section 4(2) of the Central Excises and Salt Act, 1944. It is contended by the learned counsel that under the aforesaid section a manufacturer is entitled to fix the retail price of the goods produced by him after including all charges and taxes in respect of each brand and variety of such goods. It is accordingly contended that the retail price of 'Melbum' cigarettes sold by the petitioner in such proof packing at Rs. 4.50 could not be adopted as the retail price of 'Melbum' Cigarettes sold in soft packing as the two varieties, of Cigarettes were different though carried the same brand. It is pointed out that the difference of paisas 10 in the retail prices of two varieties was natural as crush proof packing was costlier and superior as compared to soft packing. Learned counsel for the Department on the other had contended that there being no change in the quality of the cigarettes which is marketed by the petitioner is two different types of packing, the case fell squarely within the mischief of section 4(2) of Central Excises and Salt Act, 1944 and as such the respondents rightly adopted the higher retail price for the purposes of assessing the excise duty as the petitioners were selling the same brand and variety of cigarettes under two different retail prices. The decision on the above controversy rests on a true construction of the scope section 4(2) of the Central Excises and Salt Act, 1944 which reads as follows:-- "4(2) Where under this Act any article is chargeable with duty at a rate dependent on the retail price of the antical, the retail price shall be the price fixed by the manufacturer, inclusive of all charges and taxes, other than sales tax levied and collected on the basis of the sale price under the proviso to sub-section (16) of section 2 of Sales Tax Act, 1951 (III of 1951) and octroi at which any particular brand or variety of such article should be sold to the general body of consumers or, if more than one such price is so fixed for the same brand or variety, the highest such price."
The item chargeable to excise duty are specified in the schedule to this Act and cigarettes are mentioned in Schedule 1 as item No. 02.03 (II)A. The relevant entry is as follows:- "A Cigarettes-
(i) if retail price is legibly, 80% of the retail price, prominently and indelibly printed on each packet
(ii) If not covered by clause (i) 500% ad va1.''
A careful reading of section 4(2) of the Act would show that the legislature while referring to fixation of retail price of goods by the manufacturer have used two difference words, namely brand or variety. It therefore, follows that the manufacturer of a goods is entitled to fix retail prices in respect of each 'brand' and 'variety' differently. The words 'brand' and Variety' have different meanings in English language. 'Brand' and 'Variety' are defined in Webster's New World Dictionary of the American Language (College Edition) as follows:-- "Brand: l....... 2.... 3...... 4........ 5. a mark or label of identification, grade, etc. On merchandise, trade mark; hence 6. The kind or make of a commodity, as a brand of cigarette. 7 8............................................................ .9....
Variety:
1. The state or quality of being various or varied, absence of monotony or sameness 2.
Different form of some thing, condition, or quality, sort, kind as varieties of cloth. 3. a number of different things thought of together, collection of varied things, as there is a variety of items in the basement 4. Difference, variation ,
5. In biology, a group having characteristics of its own within a species, sub-division of a species, sub-species."
It is quite clear from the above definitions of the words 'brand' and Variety' that these words carry different meaning and connotation. It is therefore, quite possible that there may be different varieties of the same brand of goods. Apart from it, it is not disputed before us that cigarettes are normally offered for sale in some container or packing. This is also reflected in entry No. 02.03 of 1st Schedule of the Act which provides for legible printing of retail price on each packet of cigarette.
Similarly Rule 231-A of Excise Rules also provides that the manufacturer is required to supply the specimen of packing to the Authorities before marketing the same. Section 4(2) of the Act makes it permissible for a manufacture to include in the retail price of goods fixed by him all charges and taxes. These charges will naturally include the cost of container or packet in which such goods are normally offered for sale. It is therefore, quite conceivable that where a particular 'brand' of goods are offered in different types of packets/container, the retail prices may vary. The respondents while rejecting the plea of petitioner did not advert to this aspect of the case and also failed to consider the meaning and scope of the word Variety' used in Section 4(2) of the Act. They mainly proceeded on the assumption that since the brand and quality of the cigarettes offered for sale to the general body of consumers by the petitioner in different types of packing, was same, the petitioner had adopted two different retail prices for the same 'brand' and as such they were entitled to assess the excise duty on the higher retail price as provided in Section 4(2) of the Act.
This approach of the respondent was totally erroneous as on account of change in the quality of packet, though the 'brand' remained the s$me, the variety of the goods did not remain the same. It is significant that the retail price of cigarettes in soft packing fixed by the petitioner was not rejected by the respondents on the ground that the two packings were same or that the soft packing was not inferior to the crush proof packing or that the retail price fixed by the petitioner for cigarette in soft packing was arbitrary when compared with the price of same brand of cigarettes in crush proof packets. learned counsel for the respondent relied on the case of Atlas Battery vs. Superintendent, Central Excise and Land Customs (now reported as PTCL 1984 CL 250) to contend that where a manufacture had fixed two different prices for the same article the Central Excise Department was within his right to demand recovery of excise duty on the basis of the highest retail price. The case cited by the learned counsel is quite distinguishable and has no relevance to the circumstances of the present case. In the cited case the admitted position was that the petitioner had offered for sale storage battery of th. Same type and description under a private agreement of sale at a price which was lower than the price at which it was being offered for sale to the general body of the consumer. In the I case before us the petitioner has offered for sale the same I brand of cigarette in different type of packing which has the affect of changing the variety of goods. We are therefore, of the view that 'Melbum' cigarettes offered for sale by the petitioner to the general body of consumers in 'crush proof packing' and 'soft packing' were of different varieties though the brand of the cigarette was the same, and as such the petitioner was entitled under section 4(2) of the Act to fix different retail prices for each variety. Accordingly the action of respondents in demanding excise duty from the petitioner on the basis of higher retail price of the same brand of cigarette was illegal and without lawful authority. We accordingly declare the impugned order without lawful authority and of no legal effect. There will be no order as to costs.