The Centre on Friday told the Supreme Court the Kerala police were not empowered to detain the Italian ship MV Enrica Lexie because the murder its crew committed did not happen in the country's territorial waters.
It also questioned the state's jurisdiction to probe the shooting incident in which two Italian marines had shot dead two Indian fishermen, mistaking them to be Somalian pirates.
The court did not take kindly to the Centre's position.
It said: "We don't expect such a stand of the central government. It is unfortunate when persons killed (on February 15) are within Indian territory." Kerala chief minister Oommen Chandy said the state had taken every step after consulting the Centre.
"We still stand by our position that the incident took place in our waters and we will try them (marines) under our laws," he said.
External affairs minister SM Krishna said in Madrid there was no change in the country's stand on the killing of the fishermen and the Centre was in agreement with the Kerala government on the issue.
At the hearing of the petition wanting custody of the ship, additional solicitor general Haren Rawal submitted before a bench of justice RM Lodha and justice HL Gokhale the state government wasn't empowered to register a criminal case because the incident took place in international waters.
The government's change of heart came at a time when the Italian government moved the Supreme Court, seeking custody of its two navy men, chief master sergeant Massimilano Latorre and sergeant Salvatore Girone.
The Italian government has agreed to pay as compensation Rs 1 crore each to the families of the two fishermen killed in firing, according to the victims' lawyers.
With inputs from IANS