ITC on Diesel

 As per order u/s.85 dtd. 12-04-2006 in case of Malwa Cotton Spinning Mills, ITC on diesel used in generation of electric power is not eligible for ITC.
 However, the above decision was challenged before PVAT tribunal. As per decision of PVAT tribunal rendered on 24-05-2006, 10 STM 219, diesel used in generation of electric power used in captive consumption for manufacturing taxable items held to be eligible for ITC
 Further , the rectification application made by department before tribunal has been rejected on 29-01-2009 on the ground that decision is correct and needs no rectification
 As per Supreme Court order in Rajasthan Texchem Ltd 10 STM 358, diesel used in running generator set for production of ultimate product can only be termed as raw material and not otherwise
 As per Allahabad High Court in Goel India, Moradabad, 11 STM 286 Diesel oil and other oils used for running generator sets would be entitled to be treated as part of manufacturing process.
 As per decision of Punjab and Haryana High Court delivered on 24.08.2010, ITC on diesel is not allowable, because specific provision over rules general provision.