CESTAT Partially Allows Royal Blankets’ Appeal, Sets Aside Incorrect Customs Valuation Additions and Anti-Dumping Duty, Confirms Certain Penalties.

Headnote:

CESTAT allowed the appeals of Royal Blankets and its Director Shri Nitin Khandelwal, setting aside certain aspects of the order-in-appeal dated 13.10.2025. The Tribunal held that the declared transaction values for imported goods could not be rejected in part where supporting Excel sheets and documentation clearly indicated the actual CIF values. The Department’s addition of 20% freight and 1.125% insurance was not justified. However, the Tribunal upheld the rejection under Valuation Rule 12 for other bills and confirmed penalties under Sections 114A and 114AA. Anti-dumping duty on Bill of Entry 6985117 and reassessed Bill 2521444 were quashed.

Background:

1. Appellants: Royal Blankets and its Director Shri Nitin Khandelwal
2. Import: Various goods under different Bills of Entry
3. Issue: Alleged undervaluation of imported goods to reduce Customs duty liability; applicability of anti-dumping duty
4. SCN/Orders:

Order-in-Original: Determined higher transaction values and imposed penalties

Order-in-Appeal: Confirmed valuation adjustments, penalties, and anti-dumping duties

Appellant’s Contentions:

1. Declared invoice values were correct and supported by Excel sheets and other documents.
2. Addition of 20% freight and 1.125% insurance to invoice values was incorrect.
3. Certain Bills of Entry were reassessed; demand on them is not maintainable.
4. Anti-dumping duty on Bill 6985117 was incorrectly applied.

Revenue Contentions:

1. Appellants undervalued imports and misdeclared transactions to reduce Customs duty.
2. Valuation Rule 12 allows rejection of declared values where transaction value is doubtful.
3. Penalties under Sections 114A and 114AA are justified.
4. Anti-dumping duty applicable as per investigation.

Tribunal Findings:

1. Key issue: Whether declared transaction values are acceptable under Customs Valuation Rules.
2. Evidence gaps:

Excel sheets submitted by appellant clearly indicate actual CIF values.

Department failed to substantiate addition of 20% freight and 1.125% insurance.

Reassessment on already corrected Bills of Entry cannot be sustained.

Anti-dumping duty imposed on Bill 6985117 not justified.

Penalties under Sections 114A and 114AA are otherwise maintainable.

Decision:

1. Appeals partly allowed.
2. Rejection of declared values under Rule 12 for specific invoices upheld.
3. Addition of 20% freight and 1.125% insurance set aside.
4. Reassessed Bill 2521444 and anti-dumping duty on Bill 6985117 quashed.
5. Penalties under Sections 114A and 114AA confirmed.

Legal Provisions Discussed:

1. Customs Act, 1962: Sections 114A, 114AA, 111, 112
2. Customs Valuation Rules, 2007: Rule 9 and Rule 12
3. Anti-dumping duty provisions

CASE TITLE: Royal Blankets & Anr. vs. Commissioner of Customs