No MRP Doesn't Mean Imported Pet Food Isn't 'Put Up For Retail Sale' If It's Consumer-Ready: Bombay High Court

The Bombay High Court on Wednesday held that the absence of a maximum retail price (MRP) does not by itself prevent imported pet food packs from being treated as goods "put up for retail sale," even if they are repacked into smaller units after customs clearance.

A division bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla observed,

"The absence of MRP does not detract from this status, especially as the packs fall below the 25 kg exemption threshold under Rule 3(a) of the Legal Metrology (Packaged Commodities) Rules, 2011, and comply with Rule 6(1) labelling requirements.:

"They are complete, consumer-ready pet food bearing detailed declarations, and fall within the statutory scope of 'put up for retail sale'. In our view, classification under 2309 9010, a residual entry for bulk feed, would be both factually inaccurate and legally unsustainable.", the court added.

The bench dismissed an appeal filed by Orange Pet Nutrition Private Limited against an order of the Customs Authority for Advance Ruling (CAAR). The authority had classified the company's imported 20 kg packs of nutritionally balanced dog and cat food as goods put up for retail sale.

The company had approached the CAAR seeking a ruling that its imported pet food should instead be classified as "compounded animal feed." It argued that the 20 kg bags were never sold directly to consumers.

According to the company, the bags were taken to its warehouse after customs clearance. The products were then repacked into smaller retail packs and sold under its brand.

The company contended that goods intended to be repacked after import could not be regarded as being "put up for retail sale" at the time of import. It also relied on an earlier advance ruling in the Royal Canin case, submitting that it involved an identical issue.

The High Court, however, held that imported goods must be classified on the basis of their objective characteristics and presentation at the time of import.

It said that where a tariff entry refers to goods "put up for retail sale", the packaging, labelling, presentation and suitability for direct consumer sale are relevant considerations.

Examining the imported packs, the court noted that they carried detailed consumer-facing information. This included the nutritional composition, analytical constituents, feeding instructions, batch number, expiry date, and the names and addresses of the manufacturer and importer.

The court also noted that the products were fully formulated, ready-to-feed pet food. They required no further processing before use.

Rejecting the company's arguments, the bench held that the absence of an MRP did not prevent the packs from being treated as retail packages. It observed that the 20 kg bags fell below the 25 kg exemption threshold under the Legal Metrology (Packaged Commodities) Rules, 2011. They were therefore required to comply with the prescribed labelling requirements, which they did.

The court also rejected the company's contention that the post-import repacking of the goods meant they could not be regarded as being "put up for retail sale" at the time of import. It held that the importer's decision to repackage the goods after customs clearance could not alter the character of the goods as presented at the time of import. The relevant question, the Bench said, was whether the imported packs were objectively suitable for direct retail sale.

Addressing the company's reliance on the Royal Canin ruling, the Court held that the earlier decision was distinguishable. It noted that the case involved bulk bags weighing between 15 kg and 700 kg, which did not carry the requisite retail labelling. The Court also noted that the classification in that case had been accepted on the basis of a concession made by the jurisdictional customs authorities. It therefore found that the earlier ruling did not govern the present dispute.

The bench also distinguished the Supreme Court's decision in Jayanti Food Processing (P) Ltd. and the Customs, Excise and Service Tax Appellate Tribunal's ruling in Midas Fertchem Impex Pvt. Ltd. It held that both decisions arose in different factual contexts and did not assist the company.

Holding that the imported goods were complete, consumer-ready products suitable for direct sale, the High Court upheld the CAAR's classification of the goods as being "put up for retail sale".

It dismissed the appeal after finding that it did not raise any substantial question of law.

For Appellant: Advocates Sandeep Sachdeva, along with Samyuktha Pentyala, instructed by Dserve Legal Advocates.

For Respondents: Advocates Ram Ochani, along with Sangeeta Yadav.