Reference jurisdiction under Central Excise law is limited to questions of law; factual findings on Modvat credit defeat reference.

Reference jurisdiction under Section 35H of the Central Excise Act is confined to questions of law arising from the Tribunal's order. Where the Tribunal's decision rests on factual findings that the Department failed to establish bogus invoices, non-receipt of goods, fraud, suppression, or wilful misstatement, the High Court will not intervene in reference proceedings. On the facts found, the Tribunal's setting aside of disallowance and recovery of Modvat credit involved no demonstrable legal issue warranting a reference, so the application was held not maintainable.

---

---

Issues: Whether, in a reference application under Section 35H(1) of the Central Excise Act, 1944, any question of law arose from the Tribunal's order setting aside disallowance and recovery of Modvat credit based on findings that the alleged bogus invoices and fraud were not established.

Analysis: The reference jurisdiction under Section 35H is confined to questions of law arising from the Tribunal's order. Where the Tribunal's conclusion rests on factual findings, the High Court will not interfere unless a real question of law is shown. The order under challenge proceeded on the basis that the Department had not established, on evidence, that the assessee had not received goods or had actively participated in fraud, suppression, or wilful misstatement. The Court noted that in similar matters arising from comparable facts, the Tribunal's view had already been sustained, and that no specific legal ground had been demonstrated to justify a reference.

Conclusion: No question of law arose for reference, and the application was not maintainable on the facts found by the Tribunal.

---