As per the last report on India's Foreign Trade prepared by Department of Commerce, Government of India in December 2014, it reflects that imports during November, 2014 were valued at US $ 42821.63 million (Rs.264227.44 Crore) representing a growth of 26.79 per cent in Dollar terms and a growth of 24.91 per cent in Rupee terms over the level of imports valued at US $ 33772.92 million (Rs. 211529.90 Crore) in November, 2013.1
Further, as per the Ministry of External affairs, Government of India, the Consumer spending in the country is expected to increase about 2.5 times by 2025. It is further expected that the consumer durables market will expand at a compound annual growth rate (CAGR) of 14.8 per cent to US$ 12.5 billion in FY 2015 from US$ 7.3 billion in FY 2012. 2
Presently, the Legal Metrology Act, 2009 ("Act") and the Rules mentioned therein are the regulatory regimes which regulate trade and commerce in weights, measures, packaging, etc. and other goods which are sold or distributed by weight, measure or number and for matter connected therewith or incidental thereto.
In August, 2014, the Ministry of the Consumer Affairs issued a draft which discusses the proposed amendments to the Act3 and the Legal Metrology (Packaged Commodities) Rules ("Rules").4
The significant amendments that have been proposed to amend the Act and Rules made therein are as under:
Definition of Pre-package Commodity
The definition of the term "Prepackage commodity" which is defined under Section 3(l) in the Act presently includes a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre-determined quantity.
The definition is proposed to be changed to read as "Prepackage commodity mean a product for presentation as such to a consumer, consisting of a product and its packing material, made up before being offered for sale and in which the quantity of the product has a predetermined value, whether the packing material encloses the product completely or only partially, but in any case in such a way that the actual quantity of product cannot be altered without the packing material either being opened or undergoing a perceptible modification".
Hence, it is noted that the proposed amendment is suggested to the existing definition in order to prevent any form of inappropriate alteration to packed commodity by any of the individuals who is involved in the chain of the transaction of manufacture-sell of a commodity.
In order to exempt items not meant for retail sale, the term "Industrial consumer" which means the consumer who buys packaged commodities directly from the manufacturer for use by that industry has been proposed to include purchase not only from manufacturer but also from importers and wholesale dealers as well. Further, the provision shall clearly mention that such purchase is not meant for further retail sale.
Declarations on pre-packaged commodities
Section 18 of the Act lays down that no person shall manufacture, pack, sell, import, distribute, 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. Rule 6 of the Legal Metrology (Packaged Commodities) Rules, 2011("Rules") explicitly prescribes the mandatory declarations to be specified in all packaged commodities meant for sale, offer for sale distribution, etc. It is proposed to include sub clause 3 of Section 18 which states that "the Central Government, may provide for different declarations for different type of prepackaged commodities as required".
Further, the proviso to Rule 9 (3) of the Rules i.e. "Provided that no such declarations on the inner package is required if the inner package does not contain any declaration on its outer cover" is proposed to delete in order to give more clarity to the Rule.
Penalties for selling, etc. of non standard packages:
Section 36 (1) of the Act states that "whoever manufactures, packs, imports, sells, distributes, delivers or otherwise transfers, offers, exposes or possesses for sale, or causes to be sold, distributed, delivered or otherwise transferred, offered, exposed for sale any prepackaged commodity which does not conform to the declarations on the package as provided in this Act, shall be punished with fine which may extend to twenty-five thousand rupees, for the second offence, with fine which may extend to fifty thousand rupees and for the subsequent offence, with fine which shall not be less than fifty thousand rupees but which may extend to one lakh rupees or with imprisonment for a term which may extend to one year or with both."
The last limb (underlined) of the above provision is proposed to amend to read as "with fine which shall not be less than fifty thousand rupees but which may extend upto five lakh rupees" in order to make the it a civil offence.
However, the proposed amendment includes two new Sections i.e. section 36A which states that whosoever fails to comply with the provision of Sub-Section (2) of Section 18 of the Act shall be punished with fine which may extend to ten thousand rupees and for subsequent offence with fine up to fifty thousand rupees. Further Section 36 B states that whoever, sells, distributes, delivers or otherwise transfers any pre-packaged commodity more than the retail sale price shall be punished with fine which shall not be less than five thousand rupees but which may extend to twenty thousand rupees and, for the second or subsequent with fine not less than twenty thousand which may extend to one lakh and for subsequent offence, with imprisonment for a term which may extend to one year and also with fine.
It is observed that since introduction of the Legal Metrology (Packaged Commodities) Rules, 2009, various clarifications have been sought by the manufacturers, importers, wholesalers, retailers etc. from the Legal Metrology authorities from time to time. Undoubtedly, the above proposed amendments would bring more clarity on the provisions of the Act and Rules made therein.