ABG effort to move equipment met by Customs glare

Last Updated: Fri, Jan 04, 2013 19:51 hrs

The customs department at the Kolkata Port Trust (KoPT), has written a letter to ABG Haldia Bulk Terminals (HBT), asking it to pay duty over the import of equipment following an effort by the company to move its equipment from the Haldia Dock Complex (HDC).

“We have already asked them to pay the duty as they failed to meet the guarantee under the export promotion capital goods (EPCG) scheme, to serve the port for the next seven years and not to sell or transfer the equipment,” said Gurdeep Singh, commissioner of customs, KoPT.

When contacted by Business Standard, a senior HBT official confirmed the company had received a notice from the customs department.

“We are bound to fulfill the export obligations under the EPCG scheme. HBT has already paid about 60 per cent of the money in line with the guidelines and is ready to pay the remaining, in the next seven years,” the official added.

According to officials, equipment of Rs75-80 crore was imported without paying duty for operations at berth numbers two and eight of HDC.

Equipment of HBT of Rs140 crore is stuck at Haldia, including six cranes, 50 dumpers, 26 loaders and waybridges.

HBT, a joint venture of ABG Infralogistics and French firm Louis Dreyfus Armateurs, had pulled out of its operations at Haldia, breaking a 10-year-contract (2010-20) on October 31, citing law and order issues and alleging vested interests of port authorities as reasons. The issue got international attention following the diplomatic intervention by the French government seeking a safe passage of equipment out of Haldia, after KoPT threatened it will not allow a move in this regard.

A legal battle is going on regarding the removal of equipment at the Calcutta High Court, in which the port authorities had got a breather recently. A high court bench had asked the company not to take the equipment out of India, and also directed that special officers, along with KoPT, be informed of its location.

The port was seeking a compensation of Rs233 crore for the losses it suffered due to the firm’s pull-out of operations at Haldia. The EPCG scheme, introduced by the Centre in the 1990s, allows the import of capital goods for pre-production, production and post-production at zero duty for specific sectors, and at a concessional rate of customs duty for all sectors. Normally, this benefit comes with an export obligation of six to eight times of the duty saved, in a time period of up to 10 years.

In HBT's case, “it was forced to pull out of the port operations due to the political atmosphere.” There were also allegations made by the port authorities that the firm had illegally sold 50 dumpers, which the port refused to take out of Haldia. Earlier, the firm's chief executive officer Gurpreet Malhi, had told Business Standard that it had sold the dumpers much before the arbitration process kicked off.

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