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2018 (12) TMI 855 - AT - Central ExciseLevy of penalty under Rule 25 - 100% EOU - clandestine removal - Dimethy phosphonate - penalty - Held that:- The Noticee is doing only contract research and manufacturing service (CRAMS) wherein they manufacture fluorine molecules through R&D for the customers. The said fluorine molecules is used in specialized advanced pharmaceuticals by the client (like Pflizer, vertex, Noverts Gilead etc in USA) i.e. used into the manufacturing of their Active Pharmaceuticals ingredients (API) which they were developing at their end to get it parented and which they would launch in next 3.8 years time for the trade. Thus, Noticee manufactures the goods under contract which will be used by the clients for their R&D purpose. Thus, goods manufactured by the Noticee is manufactured under contract and are special purpose goods and thus are of no use to other customers - as per the contract Noticee cannot share the chemistry developed/manufactured/sell these product developed to any other customer. Therefore, there is no possibility of clandestine removal. The goods which were there in stock were manufactured for the purpose of export under the contract which establish the fact that goods were not meant to be removed clandestinely with intent to evade duty. Therefore, the charges of suppressing with intent to clear the same clandestinely are not sustainable. There is otherwise no evidence on record to prove any intention of clandestine clearance. Above all there is no evidence on record to prove any intention of clandestine clearance - penalty set aside. Appeal allowed - decided in favor of appellant.
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