Hyundai India Gets A Rs 22 Crore Customs Notice Over Air Purifiers

Hyundai Motor India is facing a customs duty demand of ₹22 crore concerning the import of air purifiers. The Directorate of Revenue Intelligence (DRI) issued the notice, alleging that the company misclassified the imported air purifiers, leading to underpayment of customs duties. These air purifiers were imported as components for use in Hyundai car models manufactured in India. The department contends that the air purifiers should have been classified as complete units, attracting a higher rate of duty. This classification dispute could have significant implications for Hyundai, potentially requiring them to pay the differential duty amount along with applicable penalties. The company is likely to contest the demand, potentially leading to a protracted legal battle.

Section 46 of the Customs Act, 1962, mandates the proper declaration of imported goods. Incorrect classification leading to short payment of duty can trigger Section 28, which allows for the recovery of unpaid or short-levied duties. Non-compliance can result in penalties and interest under the Customs Act.

Customs classification disputes are common, but can be costly. Companies should proactively seek advance rulings on classification to avoid potential disputes and ensure compliance. The burden of proof often lies with the importer to justify the classification adopted.

This notice highlights the complexities of customs classification and the potential for disputes, impacting import costs and compliance for automotive manufacturers.