The appellate court must consider substantial merits even when delays in filing an appeal exist, especially for public bodies seeking to rectify procedural errors.

JUSTICE PRATHIBA M. SINGH JUSTICE SHAIL JAIN Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.

2. The present appeal has been filed by the Appellant- Bharat Sanchar Nigam Limited (hereinafter, ‘B.S.N.L.’) under Section 130 of the Customs Act, 1962, assailing the order passed by the Customs, Excise & Service Tax AppellateTribunal, (hereinafter,‘CESTAT’),dated28^thJuly,2025,inAppeal Diary No. 55848 of 2024 (hereinafter, ‘impugned order’).

3. A brief background of the Appellant’s case is that, B.S.N.L., which is a telecommunications service provider, provides mobile voice and internet services through an expansive network across India. Certain tender was floated by the B.S.N.L., and Advance Purchase Orders (hereinafter, ‘APOs’) were released to the successful vendors. Certain equipment such as Baseband Unit Module (hereinafter, ‘BBU’) and Radio Access Technology (hereinafter, ‘RAT’) were to be imported and B.S.N.L. classified the same under particular classification being Customs Tariff Head 85176290.

4. However, due to a clarification which was issued by the Customs Department pursuant thereto, the classification was to be under Customs Tariff Head 85177090. Thereafter, B.S.N.L. had directed all its field units to pay the differential duty where BBUs were imported under Customs Tariff Head 85176290.In the present case, the same was paid sometime in 2021.

5. Subsequently, however, three Show Cause Notices dated 8th July, 2021, 9th September, 2021 and 16th September, 2021 (hereinafter, ‘SCNs’) were issued to B.S.N.L. as to why a penalty ought not be imposed.

6. These SCNs were issued under Section 28(4) ofthe CustomsAct,1962 and the allegations made in the SCNs were that B.S.N.L. had made wilful misstatement.

7. These SCNs were duly replied by B.S.N.L., however, in the Order-in- Original dated 20th February, 2023, which was passed by the Adjudicating Authority(hereinafter,‘OIO),penalties were imposedinthe followingterms:

“28. Now, let’s see whether the importer has paid their duty liability along with interest in full or in part:

28.1 It is a fact that the importer had paid duty along with interest to the Department in the month of February,2021andinformsuchpaymentinthemonth ofApril,2021.However,itisobservedthattheimporter in respect of ICD-Ballabhgarh had paid their duty amounting to Rs. 8,49,44,288/- along with applicable interest on 01.02.2021 whereas, the demanded duty was of Rs. 8,52,49,233/-. Hence, they had made short payment of Rs.3,04,945/- along withapplicable interest in respect of import made at ICD-Ballabgarh. The importer has also not informed any reason as to why he was liable to pay less amount in as much as Rs. 3,04,945/- and how he has arrived at the payable amount of Rs. 8,49,44,288/-. Therefore, it appears that theNoticeehasfailedtopayanamountofRs.3,04,945/- . 28.2 I have further observed that the importer has also not paid any amount of penalty in view Sec. 28(5) of Customs Act, 1962 so as to claim the benefits of the provisions of Section 28(6) of Customs Act, 1962. Therefore, I am forced to confirm penalty under Section 114A of Customs Act, 1962. [...]

ORDER

i. I reject the classification of the subject goods made by the Importer under CTH 8517 70 90 of the Customs Tariff Act, 1975 and re-classify the subjectgoodsunderChapterHeading85176290 oftheCustomTariffAct,1975,inviewofthefacts discussed in forgone paras;

ii. I confirm the demand of short payment of duty amounting to Rs. 12,63,01,812/- (Twelve Crore Sixty Three Lacs One Thousand Eight Hundred and Twelve only) under Section 28(4) of the Customs Act 1962, from M/s Bharat Sanchar Nigam Limited. However, since the Noticee has paid an amount of Rs. 12,59,96,867, I appropriate the same against the total demand of Rs.12,63,01,812/-.Accordingly,anamountofRs. 3,04,945/- is confirmed as recoverable amount of BCD.

iii. I appropriate the interest amount of Rs. 5,38,74,829 already paid by the importer under Section 28AA of Customs Act, 1962.

iv. The a