Reference lies only on a genuine question of law, not by recasting facts or distorting the earlier record.

A reference under Section 35G was held maintainable only where a genuine question of law arose from the order sought to be challenged. The Tribunal found that the Revenue had misstated the factual basis of the earlier appeal and attempted to recast the controversy as a mere Rule 173H contravention, while the prior decision had turned on the inapplicability of Rule 173H and the absence of proved fraud, wilful misstatement, suppression of facts, or intent to evade duty. Because the proposed question did not arise from the record and distorted the issue actually decided, the reference application was not maintainable and the connected cross-objections also failed.

---

---

Issues: (i) Whether the Revenue's reference application disclosed a question of law arising out of the Tribunal's earlier order so as to justify a reference under Section 35G of the Central Excises and Salt Act, 1944.

Analysis: The application was held to misstate the factual basis of the earlier appeal and to recast the controversy as one of mere contravention of Rule 173H, whereas the earlier decision had turned on the inapplicability of Rule 173H and the absence of any proved fraud, wilful misstatement, suppression of facts, or intent to evade duty. The proposed question was found not to arise from the order sought to be challenged and to confuse the real issue decided earlier. The Tribunal also noted that the statement of facts and revised draft questions distorted the record and could not found a valid reference.

Conclusion: The question proposed for reference was not maintainable and the Revenue's application failed.

Final Conclusion: No reference to the High Court was directed, and the connected cross-objections also fell with the dismissal of the reference application.

Ratio Decidendi: A reference under Section 35G lies only where a genuine question of law arises out of the order sought to be referred, and a party cannot obtain reference by reframing the decided controversy or by introducing a factual basis inconsistent with the record and findings.

---