Customs Act | Delhi High Court Allows BSNL To Belatedly Challenge ₹12.63 Crore Penalty For Misdeclaration Of Goods

The Delhi High Court has allowed BSNL (Bharat Sanchar Nigam Limited) to belatedly challenge the Rs. 12,63,01,812/- imposed upon it by the Customs Department for misdeclaration of imported goods.

A division bench of Justices Prathiba M. Singh and Shail Jain noted that the public autonomous service provider showed no valid justification for the delay in approaching CESTAT however, “considering the fact that there was a voluntary declaration by B.S.N.L., prima facie there appears to be some merit in the contention of the B.S.N.L., that it is entitled to be heard on merits.”

For context, BSNL had imported certain equipment, classified under Customs Tariff Head 85176290. However, due to a clarification issued by the Department, the classification was to be under Customs Tariff Head 85177090. Accordingly, BSNL had directed all its field units to pay the differential duty.

However, penalties came to be imposed on the company under Section 28(4) of the Customs Act, 1962 for making wilful misstatement.

Though BSNL challenged this order, CESTAT refused to entertain the appeal citing 652 days delay and the company's failure to explain it.

Before the High Court, BSNL argued that imposition of the penalty would not be justified inasmuch as (i) it is a public body, and (ii) there could not have been any allegation of collusion or wilful statement, as payment of differential duty was made voluntary, even before any notice was issued by the Customs Department.

The High Court agreed that “B.S.N.L. is a public autonomous service provider and has, itself declared and paid the differential duty voluntarily. Therefore, in the opinion of this Court B.S.N.L., is entitled to a hearing on merits.”

However, it said CESTAT order cannot be faulted as the company could not explain the delay properly. As such, it restored BSNL's appeal, subject to Rs.20,000/- costs.

Appearance: Mr. Kamal Sawhney, Mr. Deepak Thackur, Ms. Aakansha Wadhwani & Mr. Rishab Mishra, Advs. for Appellant; Ms. Anushree Narain, SSC with Mr. Naman Choula, Adv. for Respondent

Case title: BSNL v. Commissioner Of Customs

Citation: 2025 LiveLaw (Del) 1504

Case no.: CUSAA 166/2025

Click here to read order