TTK Prestige faces over ₹20 crore customs demand over HSN code dispute
Team Finance Saathi
08/Apr/2025

What's covered under the Article:
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TTK Prestige received a customs order demanding ₹20.84 crore over an HSN classification dispute related to imports made between 2018 and 2021.
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The company defended its stance with technical validation but claims that the customs order ignored material facts and legal precedents.
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TTK Prestige plans to challenge the decision legally, maintaining confidence that it will not impact its financials significantly.
TTK Prestige Ltd—India’s leading kitchen appliance brand—has recently come under the scanner of the Customs Department, receiving a hefty demand notice of ₹20.84 crore in relation to a dispute over HSN classification of a product imported between 2018 and 2021.
The Root of the Issue: HSN Code Classification
The conflict revolves around coating paint imported from China during the 2018–2021 period, used in TTK Prestige’s manufacturing operations. The company, at the time of import, adopted an HSN (Harmonized System of Nomenclature) classification which it deemed appropriate. This classification determined the applicable customs duties.
However, post-clearance, a Directorate of Revenue Intelligence (DRI) investigation suggested that the HSN code used by TTK Prestige was incorrect and that a higher duty was applicable under a different classification—which also attracts Anti-Dumping Duty.
Show Cause Notice and Response
Following the DRI’s findings, the Commissioner of Customs (Centralized Adjudication Cell, Nhava Sheva) issued a Show Cause Notice (SCN) to TTK Prestige. In response, the company presented a detailed justification for its adopted HSN code, including a technical opinion from a renowned Indian institution to back its position.
Despite these submissions, the Commissioner passed an Order in Original No. 347/2024-25/CC/NS-I/CAC/JNCH dated 28th March 2025, rejecting TTK Prestige’s arguments and upholding the reclassification—thereby raising a significant demand.
Detailed Breakdown of Financial Implications
The total financial demand made in the order is staggering, amounting to ₹20,83,95,553, broken down as follows:
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Differential Duty: ₹1,47,27,430
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Interest: ₹34,70,346
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Redemption Fine (u/s 125(1) of Customs Act): ₹1,50,00,000
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Penalty (u/s 114A of Customs Act): ₹1,81,97,777
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Penalty (u/s 114AA of Customs Act): ₹15,70,00,000
The most severe financial blow comes from the penalty under Section 114AA, contributing over ₹15.7 crore to the total demand.
Key Legal Provisions Invoked
The customs order has imposed penalties and fines under multiple sections of the Customs Act:
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Section 125(1): Redemption fine for goods liable for confiscation
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Section 114A: Penalty for short-levy or non-levy of duty due to collusion, willful misstatement, or suppression
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Section 114AA: Penalty for using false documents or making false declarations
Company's Stand: Confident of a Favourable Appeal
Despite the significant sum involved, TTK Prestige has expressed confidence that the customs authority’s order was passed without considering crucial material facts and settled legal principles. The company asserts that the classification adopted was valid and will now pursue legal remedies, including filing an appeal with the appropriate authority within the prescribed timeline.
A company spokesperson stated that TTK Prestige has full faith in the judicial process and expects a favourable outcome from the appellate authority. Given this belief, the company does not foresee a significant financial impact on its financial statements or operational stability.
Broader Implications and Industry Watch
This development could serve as a cautionary tale for other Indian manufacturers who rely on specific HSN codes for imported raw materials or components. The increased scrutiny by Customs and DRI on import classifications is likely to raise compliance costs and legal risks for companies across sectors.
Industry experts highlight that anti-dumping duty classifications are often complex and frequently contested. Misclassification—intentional or otherwise—can result in severe financial penalties, disruption of supply chains, and litigation.
TTK Prestige’s decision to submit a third-party technical opinion to back its classification also indicates the increasing need for pre-import legal and technical due diligence in today’s regulatory environment.
Summary and Next Steps
To summarise, TTK Prestige is now gearing up for a legal battle with the Customs Department, defending its original HSN classification for imported coating paint. The ₹20.84 crore demand includes duty, fines, and penalties—but the company remains optimistic that this will not translate into an actual financial outgo, pending the outcome of the appeal.
As legal proceedings unfold, investors and industry stakeholders will closely watch the case’s progress to assess its precedent-setting potential for import classification disputes in India.
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