Consistent classification of goods prevents conflicting departmental stands and supports MODVAT credit where the same inputs were already accepted as waste and scrap.

MODVAT credit could not be denied merely because the inputs were not described in the MODVAT declaration where the excise authorities had already accepted the same goods as waste and scrap of plastics in the hands of the consignor. The High Court applied the principle of consistent classification and held that the department could not take one stand on the nature of the goods for the consignor and another for the consignee-assessee. On that basis, the credit was upheld and the Revenue's objection failed.

---

---

Issues: Whether MODVAT credit could be denied on the ground that the description of inputs was not declared in the MODVAT declaration when the same goods had already been accepted by the excise authorities as waste and scrap of plastics in the hands of the consignor.

Analysis: The authorities had accepted the consignor's declaration that the compacted plastic granules were waste and scrap of plastics. Once the excise department had accepted that classification in relation to the same goods, it could not adopt a different stand in the case of the consignee-assessee. The reasoning proceeded on the principle that the department cannot apply two different interpretations to the same item.

Conclusion: The issue was decided against the Revenue and in favour of the assessee; the MODVAT credit was rightly allowed.

---