Refund of unutilised Cenvat credit cannot be denied solely because the manufactured goods are exempted.

Refund of unutilised Cenvat credit could not be denied merely because the manufactured goods were exempted, as Rule 5 of the Cenvat Credit Rules, 2004 permits refund of such accumulated credit. Following Drish Shoes Ltd., the denial based on the lower authorities' reasoning was held unsustainable, and the issue was decided in favour of the appellant.

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Issues: Whether refund of unutilised Cenvat credit could be denied to the appellant on the ground that the manufactured goods were exempted.

Analysis: The undisputed position was that the appellant had earned Cenvat credit through different modes, and the dispute concerned refund of the unutilised balance. Rule 5 of the Cenvat Credit Rules, 2004 permits refund of unutilised Cenvat credit, and the decision in Drish Shoes Ltd. was followed to hold that refund could not be denied on the reasoning adopted by the lower authorities.

Conclusion: The denial of refund was unsustainable and the issue was decided in favour of the appellant.

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