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Richa Mishra

NEW DELHI, Jan. 29

TO counter the menace of counterfeits and pass-off products which are, in reality, `stealing' the sales of genuine brands, the Federation of Indian Chambers of Commerce & Industry (FICCI) has suggested some stringent measures to facilitate the customs and excise departments.

In a letter to the Revenue Secretary, Dr S. Narayan, the chamber said that as per the present Excise Law, manufacturers who qualify as small-scale industry (SSI) are not required to seek and obtain any registration from the jurisdictional Central Excise authorities and as result, the Central Excise officials have no opportunity to question their activities.

Though the objective of this was to ensure no interference on the part of the authorities in the day-to-day functioning of the SSI units, an unwarranted fall-out of this proactive policy had been that counterfeit and pass-off manufacturers, who invariably qualify as SSI, were also enjoying the protection under the provision, FICCI said.

Elaborating on the issue, FICCI sources told Business Line that even if the counterfeit and pass-off manufacturers were identified and forced to get registered with the excise authorities, they would still not be required to pay any excise duty by invoking the exemption provided under the present excise laws for turnover of less than Rs 1 crore.

To counter this, a provision in the definition of the term `Brand Name' or `Trade Name' under the concerned notification covering exemptions relating to SSI units should be added so that manufacturers of counterfeit and pass-off products were unable to enjoy shelter under the provisions, the chamber said.

The chamber also suggested that any SSI unit, whether registered with the Directorate of Industries or not, and against whom there was a court order for investigation by the police or a complaint had been lodged with the police authorities for alleged violation of Trade Marks & Merchandise Act, 1958, as well as Copyright Act, 1963, shall be treated as someone dealing in a brand name or trade name of any other person.

Moreover, the excise authorities should have powers to investigate such units as well as demand duty, the chamber suggested.

To make the regulatory framework more stringent, such products seized by the police or court authorities should be presumed to have evaded excise duty unless proved otherwise, sources said. Further, any person found dealing in such products either as manufacturer or as distributor or as wholesaler or as retailer shall be liable to pay duty in respect of such product by reference to the MRP on the genuine product, the chamber said.

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