SC rejects Pepsi, Coca-Cola's plea against octroi on bottles

 The Supreme Court has dismissed the petition of soft drink majors CocaCola and Pepsico challenging imposition of a separate levy on glass bottles and bottle crates by the municipal corporation SMKMC.

The municipal corporation had directed the two companies to pay octroi on glass bottles and crates separately on the ground that they were being reused after cleaning up and re-filling.

A bench comprising justices Mukundakam Sharma and AR Dave did not agree with the submission of the softdrink majors that the cost of bottles and crates was included in the retail price, which was also argued before the Bombay High Court.

"Though it was vehemently argued that the cost of the bottles and crates is amortised and included in the retail sale price of the aerated beverage, no facts were placed before the High Court in that regard," the bench observed.

However, the apex court further said the cola majors can claim refund after putting more facts before the municipal corporation.

The bench also directed the Sangli Miraj Kupwad City Municipal Corporation of Maharashtra to consider mechanism suggested by the cola majors to compute the octroi.

"The said request on the part of the appellant requires consideration. Accordingly, the corporation shall consider the said proposal in accordance with law and even otherwise on their part devise a suitable, convenient and workable mechanism for levy and collection of octroi," the bench said.

The apex court order came over plea of soft drinks giants opposing separate levy on glass bottles and crates, arguing that octroi can only be on the invoice value of the product that is the drinks. Besides, they argue excise rules did not treat bottles and crates as separate products.

Earlier, the Bombay High Court had on October 8, 2010 directed Hindustan CocaCola Bottling and Pepsico India to pay the amount, saying that if the matter was decided in their favour, they would get a refund.

The cola companies that have their bottling plants in Pune were selling their soft drinks at Sangli, Miraj and Kupwad after refilling. Sangli-Miraj-Kupwad City Municipal Corporation looks after the development of the twin cities of Sangli and Miraj.