Import Classification Snafu? Cummins India Faces Crore-Sized Penalty, Launches Legal Counteroffensive

Cummins India Ltd has been imposed a harsh penalty in the form of an Order-In-Original (O-I-O) issued by the Office of the Principal Commissioner of Customs (Import), Mumbai, upholding an order of differential customs duty and equal penalty both amounting to ₹71,73,200 each, aggregating ₹1,43,46,400. The order is on account of alleged wrongful classification (HSN Code) of imported goods under the Customs Act, 1962. The company will appeal the order before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

 

Key Highlights:

 

Order Details:

On 22 July 2025, customs duty & penalty order was received by Cummins India, which was communicated by the company to the stock exchanges on 25 July 2025.

 

Argument:

The fine is in connection with reportedly wrongful HSN Code classification of imported foreign merchandise, an administrative compliance issue under Customs law.

 

Financial Impact:

Cummins India has ensured that the penalty incurred is insignificant and does not impact their operations, finances, or other business operations.

 

Company Response:

The firm would prefer an appeal to CESTAT, requesting withdrawal of the demand and penalty in totality.

 

Background:

The action is also part of continuous sectoral surveillance of customs compliance, with respective penalties in the recent past also noted for technicalities on classification. Market Reaction: Despite the statement, Cummins India made clear that its core business remains unscathed and operations are regular. 

 

Source: Marketscreener, Business Standard, Cummins India regulatory announcements.