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C.J. Punnathara
Deeptha Rajkumar

KOCHI/WELLINGTON, July 8

IT was a do or die situation for the Indian seafood export industry. If they used chemicals or preservatives in their export consignment, they would lose their export market and could even be banned from these markets for good. If they did not, the Government would deny them the lucrative DEPB facility.

Now a solution has been found for the vexed problem and the Ministry of Finance, Department of Revenue, issued Circular No. 45/2003 last month, which clearly demarcated between instances where no preservatives/chemicals were used and where only a meagre amount of preservatives/chemicals were used.

The latest circular has clearly provided an escape route to the seafood exporters since all that they have to prove is that some meagre amount of chemicals/preservatives were used in the very early stages of the catch/transport/preserve process. Being in the very early stages, it could also abide by the guidelines enforced by the importing countries, which clearly state that no chemicals or its residue should be found in the export consignment.

The whole thing flew in the face of the seafood exporter when in 2001, the Directorate of Revenue Intelligence raided several exporting units and found that there was a major discrepancy between the documents submitted for availing the DEPB benefits and those submitted for exports.

In the application submitted to DEPB, as was the statutory requirement, the firms had clearly mentioned that some chemicals and preservatives were used. While it was clearly stated in the export documents that no such chemical or preservatives were used.

"These are a clutch of archaic and redundant laws which are throttling rather than promoting the growth of Indian exports,'' sources in the seafood industry said. These laws should have been suitably amended to ensure that no trace of chemical residues are found in seafood exports and thus ensure that the country not only increases the export market but also rewards such export firms.

The final word is that the Department of Revenue Investigations (DRI)/Customs in its investigation against exports of processed, preserved and frozen fish and fish products under the DEPB scheme has decided that proceedings will continue only in those instances where no chemicals/ preservatives were at all used in the export product at any stage. And here again, in all such cases proceedings against the exporters shall continue and the matter would be adjudicated as usual on merits.

After repeated rounds of persuasive arguments, the Government finally agreed that the requirement of mandatory certificate, which states that chemicals and preservatives were used, would be withdrawn, senior sources in the Marine Products Export Development Authority said.

This decision was arrived at keeping in mind the general practice being followed by the seafood industry and the fact that the requirement for giving declaration about usage of chemicals/preservatives in the Shipping Bill has been withdrawn with effect from April 1, 2002 under the DEPB scheme, the circular said.

And in cases where there is evidence that the seafood exporter had used only a meagre percentage of chemical/preservatives, he shall be allowed to avail the DEPB benefit if he is otherwise eligible.

After the spate of investigation by DRI and Customs, the Customs Department at Mumbai and Ahmedabad had even stopped verifying/debiting of DEPB scrip's issued in respect of processed, preserved and frozen fish and fish products and started resorting to provisional assessment in respect of fresh export consignments.

Following this the Marine Products Export Development Authority (MPEDA) and the Seafood Exporters Association of India (SEAI) represented to boards that as a result of investigation by DGRI/Customs, export of fish and fish products had suffered and many genuine exporters were facing difficulties in meeting their export schedule. Further, the delay in registration of DEPB scrip's had also caused delays in clearance of import consignments.

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