Judgment 1. The short questions raised in this writ application which have been argued at length basically are that the aluminium circles classified in Item No. 206 of Heading No./Sub Heading No. 70.60 under the General Exemption No. 66, if are used for manufacture of utensils would not attract the duty in accordance with the provisions of the Central Excise Act, 1944 read with Central Excise Tariff Act, 1985 or Item No. 205 relating to Heading No./Sub Heading No./Sub Heading No. 76.06 excluding the aluminium circles shall apply and would make the aluminium circles chargeable with duty. 2. Six petitioners, all engaged in manufacturing aluminium utensils have come to this Court challenging the order of the Commissioner under which the petitioners have been required to pay excise duty on aluminium circles and are also challenging the seizure of the goods from the factory premises of each of the petitioners on the ground that each of the petitioners is manufacturing aluminium circle and is not paying the required duty. 3. The case of the petitioners in short is that for the purpose of manufacturing aluminium utensils, the petitioners purchased aluminium scrap from local market or from the supplier. According to the petitioners, after collecting aluminium scrap the same is melted in the furnace and is converted into aluminium plates and sheets. The said sheets/plates manufactured within the factory premises of the petitioners are converted into aluminium circles and finally with the help and assistance of the Hydraulic Pressure are converted into aluminium utensils. The petitioners say that the aluminium utensils are covered under Sub Heading No. 7615.10 of the Central Excise Tariff and the rate of central excise duty in respect thereof is nil under SI. No. 198 of the Table to the Notification No. 3/ 2001-CE dated 1.3.2001 as amended. The submissions of the petitioners is that aluminium circle is required to be made from the aluminium plates and sheets for manufacturing the final product, that is, aluminium utensils and as such the aluminium circle being intermediary product cannot attract the duty. It is also the case of the petitioners that apart from the raw materials used by the petitioners which is being melted and converted into aluminium plates and sheets, the aluminum plates and sheets are also covered under Heading No. 76.06 of the Central Excise Tariff and are liable to nil rate of duty under SI. It is also the case of the petitioners that apart from the raw materials used by the petitioners which is being melted and converted into aluminium plates and sheets, the aluminum plates and sheets are also covered under Heading No. 76.06 of the Central Excise Tariff and are liable to nil rate of duty under SI. No. 205 of the Table to the Notification No. 3/ 2001-CE dated 1.3.2001. According to them the exemption from payment of central excise duty under SI. No. 205 has been granted only in respect of aluminium plates and sheets intended for use in manufacture of utensils and the same is subject to Condition Nos. 19 & 34 of the said Notification. According to them when the scrap is converted into plates and sheets and for producing the utensils, the circles are cut for manufacture of utensils, the circles being the parts of the sheet in a circular form are also exempt from the central excise duty. According to them save and except captive consumption of the said circle for manufacture of utensils within the factory premises of the petitioners, the aluminium plates, sheets and circles are not to put for any other use nor are cleared from the factory premises of the petitioners and as the production of the circle is an integral part for manufacturing the utensils, the aluminium circles cannot be held to be marketable goods and as such Section 3 of the Act would not apply and they are entitled to claim absolute exemption on the aluminium circles. It is also the case of the petitioners that the input i.e. the aluminium scrap is not chargeable to duty and as the final product i.e. the aluminium utensil is also not chargeable to duty, any intermediary product which is required for manufacture of the final product cannot be held to be dutiable. According to them, despite clear position of law and the facts as asserted in the writ application, the Superintendent of Central Excise (Respondent No. 3) made surprise visit to the factory premises of the petitioners on different dates and seized the aluminium plates and sheets which were cut into different sizes on the charge that excise duty was not paid. According to them, despite clear position of law and the facts as asserted in the writ application, the Superintendent of Central Excise (Respondent No. 3) made surprise visit to the factory premises of the petitioners on different dates and seized the aluminium plates and sheets which were cut into different sizes on the charge that excise duty was not paid. The petitioners say and submit that the Department/Revenue is absolutely unjustified in observing that production of the aluminium circles for the purpose of manufacturing the utensils tantamounts to manufacturing aluminium circle and as such is chargeable to duty. Their submission in short is that unless the aluminium plates and sheets are cut into required sizes, utensils cannot be manufactured. They say and submit that Item No. 205 should be read to mean that aluminium circles which are not produced for captive consumption but are manufactured for market requirement only should fall under Item No. 206 of the Exemption Notification No. 66. 4. According to them simply by reason of cutting the said aluminium plates and sheets into circular shapes the duty cannot be held to be leviable because if that is so allowed, it would in effect and substance nullify the exemptions granted in favour of the manufacturers. In the petition it has also been contended that Item No. 206 would apply only to those manufacturers who are producing the aluminium circles for the purpose of marketing the same and Item No. 206 would not apply to the said manufacturers who are producing the aluminium circles for their captive consumption. 5. The petitioners have prayed for issuance of a writ of mandamus restraining the respondents from levying central excise duty on the production of aluminium circles for captive consumption for the purpose of manufacturing utensils and have sought a further order restraining the respondents not to take any steps requiring the petitioners to make payment of the duty and have finally submitted that the order dated 10.10.2001 passed by the Respondent-Commissioner, as contained in Annexure-5, be quashed. 6. The respondents in their return have submitted that the aluminium circles are dutiable at a rate of Rs. 2500/- per metric tone, the petitioners though were producing and manufacturing the aluminium circles but under the garb and pretext of captive consumption were not paying any duty on the aluminium circle so manufactured, therefore, the raids were effected and certain articles were seized. 2500/- per metric tone, the petitioners though were producing and manufacturing the aluminium circles but under the garb and pretext of captive consumption were not paying any duty on the aluminium circle so manufactured, therefore, the raids were effected and certain articles were seized. According to them cutting of aluminium sheets into a circular shape qualifies the product to come within the mischief of Item No. 206 under Sub Heading No. 76.06 of Central Excise Tarrif Act, 1985. The Department further says that the stand taken by the Respondent-Commissioner in his letter dated 10.10.2001 is absolutely justified and is in accordance with law. Admitting the fact that the input and the final product are exempt from duty, the Department still maintains that once the goods chargeable to duty comes into existence then the said manufacturer cannot avoid his liability and is obliged to pay the duty in accordance with the provisions of law. It is also contended that each of the petitioners in his statement before the Officers of the Central Excise have admitted that they were manufacturing aluminium circles and were consuming it captively for production of aluminium utensils. The Department says that the petitioners have purposefully taken the stand that they were converting sheets and plates into the circular form while in fact they were producing and manufacturing the aluminium circles. The Department says that since in view of Section 2(f) of the Central Excise Act which defines the term "manufacture", the petitioners cannot escape their liability and must be held answerable to the duty on the product. 7. A rejoinder was also filed by the petitioners in view of the stand taken by the respondents. The rejoinder in fact is nothing but reitreration of what has already been said in the writ application. 8. Sri Y. V. Giri, learned Senior Counsel for the petitioners has submitted before the Court that the definition of the word "manufacture" contained under Section 2(f) of the Central Excises and Salt Act, 1944 should be construed in a manner so that the intermediary product without producing which the end product cannot be manufactured is held not to be dutiable. His submission further is that the Supreme Court so also number of other Courts have already observed that the intermediary product, without which the final product cannot be manufactured, cannot be subjected to duty. His submission further is that the Supreme Court so also number of other Courts have already observed that the intermediary product, without which the final product cannot be manufactured, cannot be subjected to duty. He also submits that in the matter of Light Metal Works & anr. vs. Union of India & anr. [1986 (25) E.L.T. 613] the Bombay High Court has already held that the aluminium circles would not attract any duty. He submits that this judgment of the Bombay High Court shall cover the field and revenue would not be entitled to claim any duty on the aluminium circle. 9. On the other hand Sri Ajay Kumar Tripathy, learned counsel for the revenue submitted that the question, of manufacturing at intermediate stage and such product is liable to duty, is not res Integra. According to him during the process of manufacturing the final or last product, certain products at an intermediate stage if are required to be manufactured then they may attract levy of duty. In relation to the judgment of the Bombay High Court in the matter of Light Metal Works (supra), it was submitted that the said judgment is not applicable to the facts of the case because the said judgment has not taken into consideration the authoritative pronouncements of the Supreme Court and as subsequent to that judgment, the Supreme Court in number of other cases has already observed that coming into existence of any intermediate product may attract levy of duty. 10. We have heard the parties at length. 11. For proper appreciation of the matter we are required to refer to Section 2(f) of the Central Excises and Salt Act, 1944. Section 2(f) reads as under: "2 (f)"manufacture" includes any process, (i) incidental or ancillary to the completion of a manufactured product; and (ii) which is specified in relation to any goods in the Section or Chapter notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture, and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account." 12. In the matter of Metal Forgings Pvt. Ltd. & anr. vs. Union of India & Ors. In the matter of Metal Forgings Pvt. Ltd. & anr. vs. Union of India & Ors. (1985 (20) E. L.T. 280) it has been observed that the taxable event is the manufacture. The judgment further says that in law, there can be manufacture even at the intermediate stage, if a distinct and different product known to the commercial world comes into existence. An intermediate product which by itself is an excisable article is liable to excise duty even though it is not removed from the factory because the taxable event is the manufacture of goods and not their removal. 13. "Manufacture" means making or fabricating articles or materials by physical labour or by skill or by mechanical power vendable and useful as such. "Manufacture" implies a change but every change is not "manufacture" excisable to duty. To be manufacture excisable to duty, there has to be such transformation with a new and different article which can ordinarily come to the market to be bought and sold and known to the market having a distinct name, character and uses, must emerge. It should be a different commercial commodity. 14. In the matter of "Union of India and anr. vs. Delhi Cloth and General Mills Co. Ltd. ( AIR 1963 SC 791 ), a Constitution Bench of the Supreme Court has observed that "the excise duty is on the manufacture of goods and not on the sale. The fact, therefore, that the substance produced by the manufacturer at an intermediate stage is not put in the market would not make any difference to the chargeability of the substance to excise duty if it is covered by an item in Schedule 1 of the Act." The Supreme Court while referring to the word "goods" observed that to become "goods", an article must be something which can ordinarily come to the market to be bought and sold. The "manufacture" which is liable to excise duty under the Central Excises and Salt Act, 1944 must, therefore, be "bringing into existence of a new substance known to the market". The "manufacture" which is liable to excise duty under the Central Excises and Salt Act, 1944 must, therefore, be "bringing into existence of a new substance known to the market". The Supreme Court also observed that it is not possible to say that by inserting the definition of the word "manufacture", the legislature intended to equate "processing" to that of "manufacture" and intended to make mere processing" as distinguished from "manufacture" in the sense of bringing into existence of a new substance known to the market, liable to duty. 15. In the matter of Moti Laminates Pvt. Ltd. & Ors. vs. Collector of Central Excise, Ahmedabad [ (1995)3 SCC 23 ] the Supreme Court was again required to consider the word "goods". The Supreme Court observed as under "the word goods has not been defined in the Central Excises and Salt Act, 1944 but it has to be understood in the sense it has been used in Entry 84 of the Schedule. That is why Section 3 levies duty on all excisable goods mentioned in the Schedule provided they are produced or manufactured. Therefore, where the goods are specified in the Schedule they are excisable goods but whether such goods can be subjected to duty would depend on whether they were produced or manufactured by the person on whom duty is proposed to be levied. The expression "produced or manufactured" has further been explained by the Supreme Court to mean that the goods so produced must satisfy the test of marketability. Consequently it is always open to an assessee to prove that even though the goods in which he was carrying on business were excisable goods being mentioned in the Schedule but they could not be subjected to duty as they were not goods either because they were not produced or manufactured by it or if they had been produced or manufactured they were not marketed or capable of being marketed." (Emphasis supplied) 16. Although the duty of excise is on manufacture or production of the goods, any goods to attract excise duty must satisfy test of marketability. 17. After 1979 in view of the amendment in Rules 9 and 49, captively consumed goods became excisable to duty. Although the duty of excise is on manufacture or production of the goods, any goods to attract excise duty must satisfy test of marketability. 17. After 1979 in view of the amendment in Rules 9 and 49, captively consumed goods became excisable to duty. Originally such goods were not attracted to duty on the ground that such goods were not brought to the market for buying and selling and as such they could not be subjected to duty. But after the amendment of the Rules, a fiction has been created that any article produced or manufactured, if captively consumed shall statutorily be presumed to satisfy the test of marketability. This presumption, however, can be rebutted if it is established that the article produced and captively consumed was neither goods nor marketable nor capable of being marketed. The duty, is attracted not by captive consumption of any article but it must be goods within the meaning of the Act which apart from having a distinctive name and known as such, must be marketable or capable of being marketed. 18. The word "manufacture" also came up for consideration before the Supreme Court in the matter of Collector, Central Excise, Bombay vs. S. D. Fine Chemicals Pvt. Ltd. [1995 Supp (2) SCC 336]. In paragraph 12 of the said judgment the Supreme Court observed as under: "The decisions aforesaid make it clear that the definition of the expression manufacture under Section 2(f) of the Act is not confined to the natural meaning of the expression manufacture but is an expansive definition. Certain processes, which may not have otherwise amounted to manufacture, are also brought within the purview of and placed within the ambit of the said definition by Parliament. Not only processes which are incidental and ancillary to the completion of manufactured product but also those processes as are specified in relation to any goods in the section or Chapter Notes of the Schedule to the Central Excise Tariff Act, 1985 are also brought within the ambit of the definition. As has been repeatedly observed by the Court, though the principles enunciated are clear, it is their application that presents difficulties and it does not help to draw "any sharp or intrinsic distinction between processing and manufacture, "which would only result in an over simplification of both and tends to blur their interdependence in cases such as the present one" (ujagar Prints). It would also be not right, as pointed out in Ujagar Prints to try to restrict the sweep of the definition with reference to Entry 84 List l of the Seventh Schedule to the Constitution. Since the constitutionality of the said definition has been repeatedly upheld with reference to both Entries 84 and 97 of List l (Empire Industries and Ujagar Prints), the definition must be understood in terms it is couched. It should also be remembered that the question whether a particular process does or does not amount to manufacture as defined under Section 2(f) is always a question of fact to be determined in the facts of a given case applying the principles enunciated by this Court. One of the main tests evolved by this Court is whether on account of the processes employed or applied by the assessee, the commodity so obtained is no longer regarded as the original commodity but is, instead, recognised as a distinct and new article that has emerged as a result of the processes (Ujagar Prints)." 19. From the said judgment of the Supreme Court it would clearly appear that the word "manufacture" is to be understood not as loosely used but has to be understood in the manner in which it has been so defined. Whether a particular process does or does not amount to "mnaufacture" is always a question of fact to be determined on the facts of the case. 20. At this stage it would be necessary to refer to Section 3 of the Act which provides for duty to be charged. Sub-section (1) of Section 3 of the 1944 Act provides that "there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the Schedule to the Central Excise Tariff Act, 1985, provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured......." 21. From a perusal of Section 3 read with Section 2(f) of the 1944 Act it would be crystal clear that the levy is on goods produced or manufactured the taxable event in the case of excise duty is the manufacture or production of goods and the duty is not directly on the goods but on the manufacture thereof. The provisions of Sales Tax where the taxable event is sale cannot be applied to a case of manufacture. The taxable event is the manufacture of the goods which have their marketability and are known to the commercial world. To become goods an article must be something which can ordinarily come to the market to be bought and sold. 22. In the matter of South Bihar Sugar Mills vs. Union of india ( AIR 1968 SC 922 ) the Supreme Court observed as follows:- "As the Act does not define goods, the legislature must be taken to have used the word in its ordinary dictionary meaning. Dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market." 23. Manufacture involves bringing into existence a new substance and not merely producing some change in a substance. Manufacture implies a change though every change is not the manufacture. Every change or process may not be manufacture. it is only when there is transformation in the commodity that one can say manufacture has taken place i.e. when a new and different article emerges having the distinctive name, character or use. 24. In the matter of Bhor Industries Ltd., Bombay vs. Collector of Central Excise, Bombay [(89) 1 SCC 602] the Supreme Court observed that the taxable event in the case of excise duty is the manufacture of goods. In order to be goods as specified in the Entry, it is essential that as a result of manufacture, goods must come into existence. For articles to be goods, these must be known or these must be capable of being sold in the market as goods. Actual sale in the market is not necessary. User in the captive consumption is not determinative but the article must be capable of being sold in the market or known in the market as goods. For articles to be goods, these must be known or these must be capable of being sold in the market as goods. Actual sale in the market is not necessary. User in the captive consumption is not determinative but the article must be capable of being sold in the market or known in the market as goods. According to the Supreme Court, simply because certain articles fall within the Schedule, it would not be dutiable under Excise Law, if the said article is not goods known to the market. Marketability, therefore, is an essential ingredient in order to be dutiable under the Schedule to Central Excise Tariff Act, 1985. 25. Whether the aluminium circles produced, made, manufactured or converted from the plates and sheets are marketable or not is not a dispute before us. Item No. 206 of the General Exemption No. 66 says that such circles would be chargeable to duty. The only question for consideration would be that whether entry of such article in the Schedule is sufficient or the article in particular should be a marketable article which is known to the commercial world. 26. In paragraph 17 of the writ application the petitioners themselves have submitted that so far the aluminium circles are concerned, though the same are separate excisable commodity, but it is not being produced by the petitioners rather those aluminium circles are altogether a different product which are regularly manufactured by various large scale industries in India, such as Hindalco, Indian Aluminium and various other manufacturers and those industries are clearing the aluminium circles from their factories on pay- ment of central excise duty. From this it would clearly appear that Aluminium Circles are marketable goods and are known to the commercial world. 27. Though the petitioners are saying that what they are producing are circular plates for the purpose of manufacturing the utensils but in fact the petitioners are producing and are bringing into existence the aluminium circles which are captively consumed by them for manufacturing utensils. 28. Sri Giri has placed his strong reliance on certain judgments which we shall now take up for consideration. He has placed his reliance on the judgment of the Supreme Court reported in the matter of Kishore Metal & Wire Industries vs. Collector of Central Excise, Bombay [ (1998)8 SCC 334 ]. 28. Sri Giri has placed his strong reliance on certain judgments which we shall now take up for consideration. He has placed his reliance on the judgment of the Supreme Court reported in the matter of Kishore Metal & Wire Industries vs. Collector of Central Excise, Bombay [ (1998)8 SCC 334 ]. In the said matter the question before the Supreme Court was that what was really meant by "old scrap". The Supreme Court observed that the words seem tautologous and their benefit should go to the assessee. In our opinion this judgment does not help the petitioners. 29. Sri Giri has also placed his reliance upon a Single Bench Judgment of the Bombay High Court in the matter of Light Metal Works and others vs. Union of India and another [1986 (25) E.L.T 613]. The petitioners of that case were purchasing duty paid aluminium sheets, the same were cut to required sizes in the square shapes at the first stage. The pieces were further cut on the hand operated shearing machine to convert them into circular shape. Such circular pieces were then put in the spinning machine to get the required shape and thereafter the same were welded for the purpose of manufacture of topes. The question before the High Court was that the circles cut out from the aluminium sheets and used in the manufacture of topes, the claim of the department that circles were liable for payment of duty under Tariff Item 27(b) was not correct and the petitioners were not required to follow the procedure under Rule 56-A of the Central Excise Rules. After distinguishing a judgment of the Supreme Court in the matter of Union of India vs. Hindu Undivided Family Business known as Ramlal Mansukhari Rewari & anr. (1978 E.L.T. 389) the Court observed that the said judgment of the Supreme Court was on different facts and therefore was not applicable. The High Court observed that circles, which came into existence at an interim stage of the process of manufacture of topes, were not liable for payment of excise duty. In our opinion, the judgment of the High Court is not in accordance with law and does not take into consideration the definition of the word "manufacture" so also the language contained under Section 3(a) of the 1944 Act. In our opinion, the judgment of the High Court is not in accordance with law and does not take into consideration the definition of the word "manufacture" so also the language contained under Section 3(a) of the 1944 Act. Even otherwise it would be clear that the said judgment was delivered at a time when General Exemption No. 66 was not brought into force. 30. From the language of the General Exemption No. 66 it would clearly appear that the aluminium circles are considered to be different entity in comparison to aluminium plates and sheets. When the law says that particular items are to be considered as different entities then there is no scope to hold that the items would be same. When the legislature in its wisdom says that sheets and plates are different to aluminium circles then there is no scope to say that there are not aluminium circles but are in fact circular plates and sheets. Whatever is circular and even if made of a sheet or plate will have to be taken to be aluminium circle and it cannot be said that an aluminium circle or aluminium plate cut in circular shape would continue to be aluminium sheet or aluminium plate. 31. The question that whether an intermediate product can be charged to duty or not would depend upon coming into existence of such a product. 32. There is absolutely no warrant for the proposition that it is the final or last product which alone can be considered to involve the process of manufacture. It cannot be said that till raw material is converted into the last product, there is no manufacture even if in the intermediate stage a distinct product known to the commercial world comes into existence. If a new substance is brought into existence from raw materials earlier to the manufacture of the end product, it will be manufactured to attract liability to duty. In law, there can be manufacture even at the intermediate stage, if a distinct and different product known to the commercial world comes into existence. An intermediate product which is by itself an excisable article is liable to excise duty even though it is not removed from the factory and consumed captively because the duty of excise is on manufacture or production of goods. An intermediate product which is by itself an excisable article is liable to excise duty even though it is not removed from the factory and consumed captively because the duty of excise is on manufacture or production of goods. In other words, if the intermediate product which comes into existence is a complete product known to the market, it is excisable. But if something more is to be done to the product or with reference to the product to bring it into the form known to the commercial world, it cannot be treated as excisable. if the substance produced at an intermnediate stage is not put in the market, it will not make any difference to its excisability provided it is otherwise marketable. 33. In the matter of Anwar Khan mahboob Co. vs. State of Bombay (AIR 1986 SC 213) it was held that conversion of raw tobacco into bidi pattis by removing stem and dust, which, in turn, were required for the manufacture of bidis, emerged into a commercially different commodity. In the case of State of Madras vs. Swasthik Tobacco Factory [1967 (17) STC 316] the Supreme Court held that the conversion of raw tobacco into chewing tobacco was a manufacturing process resulting in the production of a different commercial commodity. 34. From these judgments of the Supreme Court it would clearly appear that if an intermediate product comes into being and such intermediate product is known to the commercial world and is also marketable then such goods are leviable to excise duty. The petitioners though say that aluminium circles are marketable but their defence is that they are consuming the material captively and as the articles are not leaving their factory premises, they are not answerable to duty. In our opinion, such an argument is not available to the petitioners in view of the legal position that the duty is leviable on the manufacture and not on the sale of the articles. 35. Reliance is also placed on the judgment of the Supreme Court in the matter of Indian Petrochemicals Corporation Ltd. vs. Collector of Central Excise, Vadodara [ (1997)3 SCC 515 ]. In our opinion, the said judgment does not help the petitioners. 35. Reliance is also placed on the judgment of the Supreme Court in the matter of Indian Petrochemicals Corporation Ltd. vs. Collector of Central Excise, Vadodara [ (1997)3 SCC 515 ]. In our opinion, the said judgment does not help the petitioners. In the said matter the Supreme Court observed that the raw material was intended for use, and manufacture of the specified products was exempt from excise duty, while using the raw material one of the intermediate by-products involuntarily resulted in the process of manufacture of specified products and the involuntary product was used for manufacturing some other specified product. The residual portion of such by-product was used for manufacture of goods, not specified in the exemption notification, were not excisable. According to the Supreme Court the intermediate product was an incidental product which was further processed to obtain petroleum resins. The Supreme Court observed that it could not be considered as a diversion of raw naphtha obtained at concessional rates for manufacture of other items. Not only that in the said matter the Supreme Court had also passed its judgment on the Notification No. 28/89-C.E. dated 1.3.1989. According to the said Notification, the Central Government exempted goods falling under Chapter 27 of the Schedule to the Central Excise Tariff Act produced in factory and utilised in the factory in which the said excisable goods are produced for the manufacture of other goods or as fuel for such manufacture. Present is not a case of that type. In the present case neither production of the aluminium circles is involuntarily nor the produced article i.e. aluminium circles are used for manufacture of other goods or as fuel for such manufacture. 36. Reliance was also placed on the judgment of the Supreme Court in the matter of Steel Authority of India Ltd. vs. Collector of Central Excise [ (1996)5 SCC 484 ] to contend that when the intermediate product is intended to be used and in fact used then such intermediate product would not be subject to levy on duty. In the matter of Steel Authority of India Ltd. (supra) the facts were altogether different. In the said matter the exemption notification required proof that the raw naphtha was "intended for use" in the manufacture of fertilizer and not that the raw naphtha was used for manufacture of fertilizer. In the matter of Steel Authority of India Ltd. (supra) the facts were altogether different. In the said matter the exemption notification required proof that the raw naphtha was "intended for use" in the manufacture of fertilizer and not that the raw naphtha was used for manufacture of fertilizer. The Supreme Court found that raw naphtha though was used for manufacture but could not result in manufacture of fertilizer because of supervening circum stances over which the manufacturer had no control e.g. the low, uncertain and fluctuating availability of power, that the reformed gas produced during the interim stage of manufacture had to be vented out. 37. In the matter of M/s. J. K. Cotton Spinning and Weaving Mills Ltd. and another vs. Union of India and others [1987 (Supp) SCC 350] the Supreme Court took into consideration the effect of the amendments to Rules 9 and 49 and after upholding their legality and validity observed that a distinction cannot be made between unsized yarn and sized yarn, for the unsized yarn when converted into sized yarn does not lose its character as yarn. The Supreme Court further observed that the Explanations to Rules 9 and 49 of the Central Excise Rules, 1944 have been added so as to obviate any doubt. The Supreme Court, however, was of the opinion that the rule contemplated not only removal from the place where the excisable goods are produced, cured or manufactured or any premises appunmenant thereto, but also removal within such place or premises for captive consumption or home consumption i.e. when excisable goods manufactured in the factory are used for production of another commodity. 38. In our opinion, the judgment of the Supreme Court in the matter of M/s. J. K. Cotton Spinning & Weaving Mills Ltd. (supra) would make it clear that after amendment of Rules 9 and 49 of the 1944 Rules, there is no scope to say that the intermediate product is subject to levy but if it is consumed captively, it shall not be subject to the duty. 39. From the discussions aforesaid it would clearly appear that the aluminium circles which are manufactured/produced by the petitioners for their captive consumption or intended for use in the manufacture of utensils cannot escape the duty. Item Nos. 205 and 206 referred to in General Exemption No. 66 have to be given their full effect. 39. From the discussions aforesaid it would clearly appear that the aluminium circles which are manufactured/produced by the petitioners for their captive consumption or intended for use in the manufacture of utensils cannot escape the duty. Item Nos. 205 and 206 referred to in General Exemption No. 66 have to be given their full effect. The exemption available on aluminium plates and sheets intended for use in manufacture of utensils shall not be available to the aluminium circles even if the said aluminium circles are an integral part of utensil manufacturing and in fact have been produced with an intention to use the same in manufacture of utensils. 40. The petition deserves to and is accordingly dismissed.