08-Dec-2023
2 mins read
The Chennai-based TVS Electronics Ltd encountered a substantial setback on December 7, receiving a hefty notice of Rs 35.58 crore from the Chennai Customs Department. This alarming development stems from a disagreement with the Customs Department over the classification of thermal line printers the company imported from a neighbouring country under the duty-free category. This order notice includes the differential duty of Rs 10.02 crore and fines and penalties on the company, its Customs House Agent, Company Secretary, and other officials.
The Disputed Classification Issue
At the core of this financial blow lies a disagreement between TVS Electronics and the Customs Department regarding the appropriate classification of the imported thermal line printers for customs duty determination. The company firmly believes the printers fall within the duty-free category, a stance that clashes with the Customs Department’s viewpoint.
Company’s Response and Legal Manoeuvres
In response to the Customs Department’s notice, TVS Electronics provided a detailed reply, carefully presenting its case. Additionally, the company has engaged the services of a legal attorney to navigate the complex legal landscape and represent its interests in the ensuing proceedings.
Preparing for a legal battle, TVS Electronics is taking proactive steps by initiating the process of filing an appeal before the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in Chennai. This strategic move aims to challenge the order and protect the company’s position amidst the ongoing dispute.
Financial Impact and Market Response
Despite the daunting financial notice, TVS Electronics managed to conclude the previous trading session on a relatively positive note, with shares closing at Rs 352.95, marking a 1.51% increase on the Bombay Stock Exchange (BSE).
The company’s financial report for the quarter ended September indicated net sales of Rs 92.19 crore. However, amidst the ongoing dispute, the net profit for the same period took a hit, declining by 60.14% YoY, landing at Rs 1.12 crore.
TVS Electronics saw a 20.47% increase in its stock value over the year, outperforming the frontline Nifty’s returns of approximately 15% during the same period.
In summary, the clash between TVS Electronics and the Customs Department regarding the classification of imported thermal line printers has led to a significant financial confrontation.
Despite the turbulence caused by the customs notice, TVS Electronics remains resolute in its plan to challenge the order. The company has reinforced its stance by appointing a legal attorney to navigate the forthcoming proceedings before the CESTAT in Chennai.