Clarificatory and retrospective amendment to excise rules can raise a referable question of law on Modvat credit entitlement.

Rule 57E of the Central Excise Rules, 1944 was treated as clarificatory and procedural in nature, with retrospective application to unsettled situations, and on that basis the Tribunal upheld entitlement to Modvat credit on differential duty paid on inputs. The reference application was confined to whether that conclusion gave rise to a question of law for High Court consideration, and the proposed questions were noted as requiring recasting. A reference was ordered because the issue of whether an amendment is clarificatory and retrospective was held to raise a referable question of law.

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Issues: Whether the Tribunal's view that Rule 57E of the Central Excise Rules, 1944 was clarificatory and retrospective, and that the assessee was entitled to Modvat credit on differential duty paid on inputs, gave rise to questions of law warranting reference to the High Court.

Analysis: The order records that the Tribunal had treated Rule 57E and its amendments as merely clarificatory in content and procedural in nature, with retrospective application to situations not yet concluded. On that basis, the Tribunal upheld the assessee's entitlement to credit of differential duty paid on inputs. The reference application was examined only to the extent of identifying whether a question of law arose from that conclusion. The Tribunal also noted that the proposed questions needed recasting and that the amendment introducing the new proviso to Rule 57G(2) was not being contended as retrospective by the applicant.

Conclusion: Questions of law were held to arise, and the reference to the High Court was ordered.

Final Conclusion: The application succeeded and the matter was directed to be referred to the High Court on the framed questions.

Ratio Decidendi: Where a tribunal's conclusion turns on whether an amendment is clarificatory and retrospective, the resulting legal issue is referable as a question of law.

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