Applicability of Legal Metrology law on component manufacturers supplying goods to OEMs in packaged form
The Legal Metrology Act, 2009 (‘LM Act’) provides standards and regulations of weights and measurements and incidental aspects. Further, the Legal Metrology (Packaged Commodities) Rules, 2011 (‘LMPC Rules’) provide various declarations to be made on retail and wholesale packages including registration requirement for packer of packaged commodities.
Here, we wish to highlight following provisions of LM Act and LMPC Rules that provide for liability to seek registration and requirement to affix label on packaged goods:
- Section 2(f) defines ‘pre-packaged commodity’ as commodity which without the purchaser being present, is placed in a package so that product contains pre-determined quantity. The definition of pre-packaged commodity (as read with available jurisprudence) is quite wide and covers all type of packages (whether sealed or not).
- Rule 2(k) defines ‘retail package’ to mean package intended for retail sale to ultimate consumer.
- Rule 10 mandates affixation of labels on retail packages at time of removal of pre-packaged commodity and cannot be postponed to subsequent premises like OEM’s premises etc.
- Rule 2(bb) and Rule 2(bc) define industrial and institutional consumers to include goods for use by that industry.
- Rule 3 exempts requirement of making declarations on retail packages supplied to industrial and institutional customers.
- Rule 27 mandates registration for manufacturer, packer, or importer who pre-packs or imports pre-packaged commodity.
As per the above provisions, every packer or importer supplying / importing pre-packaged commodities needs to obtain registration under Legal Metrology law even if it is supplying goods exclusively to industrial and institutional customers as there is no exemption from taking registration. Further, such pre-packaged commodities need to have declaration ‘Not for Retail Sale’. On pre-packaged commodities meant for retail sale, all declarations required under the LMPC Rules needs to be declared at the time of their removal.
NITYA Comments: Legal Metrology law has wide applicability and will apply most of component manufacturers of OEMs. This law makes Directors of a Company responsible for compliance and non-compliances attract severe consequences like seizure of goods, penalties, prosecution for directors etc. Thus, component manufacturers can analyze applicability of registration and labelling requirements on their business and undertake necessary compliance to avoid any adverse implications.
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