CESTAT Ruling: No Penalty for Dummy Shipping Bills Used Solely for Internal Calculations

The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, recently delivered a significant ruling in the matter of CONCOR CFS Vs Principal Commissioner of Customs. The Tribunal set aside the penalties levied on a Container Freight Station (CFS) operator and its personnel, ruling that the generation of a dummy shipping bill for the specific purpose of calculating internal charges does not constitute a fraudulent act under the Customs Act, 1962.

The appellate authority emphasized that procedural lapses regarding the admissibility of evidence and the misapplication of penal provisions warranted the annulment of the adjudication order.

Factual Matrix of the Dispute

The case originated from an Order-in-Original dated 28.03.2025, wherein the revenue authorities imposed penalties on the custodian (the assessee) and its employees. The core allegation was that the assessee had permitted the "gate-in" of two export containers based on a fictitious shipping bill and export application.

According to the records, the sequence of events was as follows:

• Gate-In Time: The two containers were granted entry into the CFS at approximately 02:40 hours on 16.11.2018. This entry was backed by valid entry permits issued on the previous day.
• Document Generation: Later that same day, at 17:52 hours, a dummy export application and a dummy shipping bill bearing the number "1234567" were generated.

The assessee contended that these dummy documents were created solely at the request of a customs broker to calculate shifting, handling, and storage charges. The broker had intended to move the containers to a different facility, specifically All Cargo Logistics, pending customs permission.