February 04, 2026 : The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal has set aside a customs duty demand of ₹92.18 crore raised against TTK Protective Devices Ltd., holding that the show cause notice was barred by limitation and that the extended period could not be invoked in a classification dispute.
The decision was delivered by a Bench comprising M. Ajit Kumar (Technical Member) and Ajayan T.V. (Judicial Member) in Customs Appeal No. 40356 of 2016, arising from an order passed by the Commissioner of Customs, Chennai-IV.
TTK Protective Devices Ltd., a manufacturer of contraceptives, had imported natural rubber latex concentrate from Malaysia during the period April 2011 to March 2012. The company classified the imports under Customs Tariff Heading 4001 29 10, applicable to Hevea rubber. Following a post-clearance audit, the department took the view that the goods were wrongly classified and ought to fall under Heading 4001 10 20, which attracted a substantially higher rate of basic customs duty. On this basis, a show cause notice issued in March 2015 demanded differential duty of ₹92,18,355 along with interest and an equal penalty.
Before the Tribunal, the appellant argued that the notice was issued well beyond the normal limitation period of one year prescribed under the Customs Act. It was also pointed out that identical goods had been assessed and cleared by the department itself under the same tariff heading in earlier periods, including consignments assessed by departmental officers before the self-assessment regime came into force. As such, there was no suppression of facts or wilful misstatement that could justify invocation of the extended limitation period.
After examining the records, the Tribunal noted that at least two of the disputed Bills of Entry were filed before self-assessment became the norm and had been assessed by customs officers. The Bench observed that the department was aware that the appellant was importing rubber latex concentrate with about 60 percent dry rubber content of Hevea origin, and there was no material to show that the goods covered by the impugned Bills of Entry were any different from those cleared earlier.
The Tribunal further held that the dispute essentially involved interpretation of tariff entries, where a genuine divergence of views was possible. It reiterated that the burden to prove misclassification lay on the revenue and that, in the absence of any positive act showing suppression or wilful misstatement, the extended period of limitation could not be invoked. The Bench also took note of the appellant’s status as an Accredited Client Programme importer, observing that such entities are granted facilitation only after demonstrating consistent compliance, and allegations of misconduct against them must be backed by cogent evidence.
Relying on settled law, the Tribunal concluded that mere interpretational differences in classification cannot justify reopening assessments beyond the normal limitation period. Having held the demand to be time-barred, it declined to examine the classification issue on merits and set aside the impugned order in its entirety. The appeal was allowed with consequential relief to the appellant as per law.
Cause Title: TTK Protective Devices Ltd. versus Commissioner of Customs
Coram: M. Ajit Kumar (Technical Member) and Ajayan T.V. (Judicial Member)
