The lingering confrontation between the Customs and the port based Special Economic Zone at the International Container Transhipment Terminal (ICTT) Vallarpadam is likely to cool down soon with the Kochi port taking up the issue with the Union Government seeking an early settlement.

The port’s intervention was in the wake of a recent letter forwarded by the Kochi Customs to the port management threatening to withdraw their services from the ICTT unless their demands were met.

Highly placed sources in the port said that the two Government organisations such as the Customs and the SEZ are at logger heads over the functioning of Customs officials inside the ICTT, which is considered to be country’s first port-based SEZ.

Meanwhile, the SEZ Development Commissioner, Mr M.S. Rao has convened a meeting here on Wednesday with Customs, SEZ officials, ICTT officials, the CISF and the State Police to review the situation.

Demands

The demands of the Customs included free access to their officials inside the ICTT for inspection and other related purposes whereas the SEZ was of the view that those Customs officials other than designated for inspection or any other inspecting agencies should obtain permission from the SEZ.

The sources pointed out that around 10 Customs officials are posted round-the-clock at ICTT to permit inward and outward movement of containers. Apparently the matter has been blown out of proportion and it is understood that the SEZ has taken up the issue with the Commerce Department for better clarity on the respective roles of the SEZ and Customs officials with specific reference to Vallarpadam SEZ.

It is learnt that the Study Group, constituted by the Commerce Department with representation from the Revenue Department, according to the decision taken by the Secretary-level meeting held on April 19 to examine the best practices followed in ports elsewhere has completed its study and will be submitting its report shortly.

This report is expected to indicate the future modalities for operating the ICTT at Vallarpadam SEZ, the sources said.

The sources are of the view that in terms of Section 53 of the SEZ Act, it appears a notified SEZ (including the non-processing area) is a territory outside the Customs territory for those purpose of undertaking authorised operations.

Hence, the presumption made in the letter of Customs to the port that demarcation of non-processing area in the SEZ will facilitate implementation of the provisions of the Customs Act is not correct, they pointed out.

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