CESTAT Kolkata- No Late Filing Fee for Excess Bulk Cargo Due to Inherent Variations

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

Date: 16.07.2026

CESTAT Kolkata- No Late Filing Fee for Excess Bulk Cargo Due to Inherent Variations

A recent decision by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, has provided significant relief to importers dealing with bulk cargo, particularly coal. The case of M/s. Saraogi Udyog Private Limited versus the Commissioner of Customs (Preventive), Bhubaneswar, addressed the contentious issue of late filing fees imposed on supplementary Bills of Entry for excess quantities arising from inherent cargo variations.

Background of the Case

M/s. Saraogi Udyog Private Limited, a regular importer of steam coal through Paradeep Port, encountered a situation where, after clearing the declared quantity of coal, a marginal excess remained in the port stockyard. This excess was attributed to natural and unavoidable factors such as:

• Variations in moisture content
• Differences in draught survey and physical weighment

These are recognized phenomena in the bulk cargo trade and are beyond the control of importers.

To regularize the clearance of this excess, Saraogi Udyog followed the prescribed procedure:

1. Obtained permission from Customs authorities
2. Completed a joint stack survey
3. Filed Supplementary Bills of Entry for the excess quantity
4. Paid the applicable customs duty

However, Customs authorities levied a late filing fee under Section 46(3) of the Customs Act, 1962, calculated from the date of the original Import General Manifest (IGM). The importer paid this fee under protest to avoid further port charges and cargo deterioration.

Legal Arguments and Proceedings

Saraogi Udyog argued that:

• The excess quantity was part of the original consignment, arising solely due to the nature of bulk cargo.
• There was no deliberate delay or mala fide intention in filing the supplementary documents.
• The late fee was unjustified, especially since all duties were paid promptly and transparently.

The Customs authorities, however, maintained that:

• The excess could not be treated as part of the original consignment.
• The importer had not sought provisional assessment or notified Customs about possible variations in time.
• The late fee was mandatory under the law.

Both the Assistant Commissioner and the Commissioner (Appeals) upheld the levy of the late fee, prompting Saraogi Udyog to appeal to CESTAT Kolkata.

CESTAT Kolkata’s Analysis and Decision

The Tribunal examined the facts and legal precedents, notably referencing the recent case of M/s. Kai International Private Limited, which involved similar circumstances. Key findings included:

• The original Bills of Entry were filed on time and assessed without dispute.
• The excess quantity was discovered only after clearance, due to inherent cargo characteristics.
• There was no evidence of fraud, misdeclaration, or intent to evade duty.
• The importer paid all applicable duties on the excess immediately upon assessment.

The Tribunal emphasized that Section 46(3) of the Customs Act allows for waiver of late fees if sufficient cause is shown. The decision cited CBEC Circulars and Standard Operating Procedures, which instruct officers to exercise discretion and not impose penalties mechanically.

Key Excerpts from the Order

“The levy of late filing fee, therefore, appears to have been imposed solely on account of circumstances arising from the peculiar nature of bulk cargo imports, without adequately considering whether the appellant had sufficient cause for not filing the Supplementary Bills of Entry earlier.”

“The ratio laid down in the [Kai International] decision is squarely applicable… as the factual matrix before me is substantially identical… No distinguishing feature, either on facts or in law, which would warrant taking a view different from that already adopted by this Tribunal, has been brought on record by the Revenue.”

Outcome and Implications

The CESTAT set aside the late filing fee and allowed the appeal, granting consequential relief to Saraogi Udyog. This ruling clarifies that:

• Importers of bulk cargo who face unavoidable quantity variations are not automatically liable for late filing fees on supplementary Bills of Entry, provided there is no mala fide intent and all duties are paid.
• Customs officers must exercise discretion and consider the practical realities of bulk cargo trade before imposing penalties.

Conclusion

This decision is a significant precedent for importers of bulk commodities, reinforcing the principle that penalties should not be imposed mechanically and that genuine trade practices and challenges must be recognized. Importers facing similar issues can now cite this ruling to seek relief from unwarranted late filing fees, provided they act transparently and in accordance with prescribed procedures.

Source: CESTAT Kolkata

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