CESTAT Kolkata Sets Aside Late Fee Imposed on Supplementary Bills of Entry

Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 17.06.2026

CESTAT Kolkata Sets Aside Late Fee Imposed on Supplementary Bills of Entry

A recent decision by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, has set a significant precedent for importers facing late fee penalties under customs regulations. The case involved multiple appeals by M/s Agarwal Coal Corporation Pvt. Ltd. against the imposition of late fees for delayed filing of supplementary Bills of Entry, a situation arising from excess cargo discovered post-clearance.

Background of the Case

Agarwal Coal Corporation imported several consignments of steam coal through the port at Bhubaneswar. The company filed the original Bills of Entry within the stipulated time. However, after the goods were cleared, draft survey reports revealed excess quantities of coal remaining at the port. To regularize these excess quantities, Agarwal Coal sought amendments to the Import General Manifest (IGM) and the original Bills of Entry, offering to pay the applicable customs duty.

When the customs authorities denied the amendment requests, Agarwal Coal filed supplementary Bills of Entry for the excess cargo. These supplementary filings, however, were made beyond the prescribed time limit under Section 46 of the Customs Act, 1962. As a result, the customs department imposed late fees, which were upheld by the lower appellate authority, prompting Agarwal Coal to appeal to the Tribunal.

Legal Arguments and Grounds of Appeal

Agarwal Coal argued that:

1. No Fault of the Importer: The delay in filing supplementary Bills of Entry was not due to any fault or negligence on their part, as the original filings were timely and the excess cargo was only discovered later.
2. Discretion to Waive Fees: Section 46(3) of the Customs Act empowers the Proper Officer to waive late fees in deserving cases, especially when the delay is justified.
3. Precedents and SOPs: The company cited previous tribunal decisions (such as Blueleaf Trading Company v. Commissioner of GST & C.Ex., Tiruchirapalli) and referred to the Standard Operating Procedure (SOP) issued by the Customs Department, which advises against routine or mechanical imposition of penalties.

Tribunal’s Analysis and Findings

The Tribunal, made several key observations:

• No Importer Fault: The delay was not attributable to any act or omission by Agarwal Coal. The excess cargo was part of the original consignment, and the company acted promptly upon discovery.
• Judicious Use of Discretion: Section 46(3) and related regulations allow for waiver of late fees if the Proper Officer is satisfied with the reasons for delay. The Tribunal emphasized that penalties should not be imposed mechanically.
• Supporting Precedents: The Tribunal referenced the Blueleaf Trading Company case and internal SOPs, both of which support the waiver of late fees in cases where importers demonstrate bona fide reasons for delay.
• Consistency with Previous Rulings: The Tribunal noted that similar relief had been granted in the case of Kai International Pvt Ltd vs. CC (Prev), Odisha, reinforcing the principle of fair and judicious application of late fee provisions.

Final Order and Impact

The Tribunal set aside the late fees imposed on Agarwal Coal Corporation, allowing all appeals and granting consequential relief. The decision underscores the importance of:

1. Fairness in Customs Administration: Authorities must consider the circumstances leading to delays and exercise discretion judiciously.
2. Clarity for Importers: Importers who act in good faith and promptly address discrepancies should not be penalized for delays beyond their control.
3. Guidance for Future Cases: The ruling provides a clear reference for similar disputes, promoting consistency and fairness in customs enforcement.

Conclusion

The CESTAT’s decision in favor of Agarwal Coal Corporation marks a significant development in customs jurisprudence. It reinforces the principle that penalties should be imposed only when justified and that authorities must consider the bona fides of importers. This ruling is expected to benefit not only Agarwal Coal but also other importers facing similar challenges, ensuring a more balanced and equitable customs regime.

Source: CESTAT Kolkata

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