Cutting tool observed by rascal (6)
I believe the answer is:
ripsaw
'cutting tool' is the definition.
(I've seen this before)
'observed by rascal' is the wordplay.
'observed' becomes 'saw' (seen).
'by' says to put letters next to each other.
'rascal' becomes 'rip' (I can't explain this - if you can you should believe this answer much more).
'saw' after 'rip' is 'RIPSAW'.
Can you help me to learn more?
(Other definitions for ripsaw that I've seen before include "It cuts along the grain" , "Cutting tool" , "Coarse wood cutter" .)