We are a manufacturer of chemicals.For the year 2007-2009 we had paid service tax of about Rs.3,50,000 on sales commission & taken this amount as credit which was subsequently used for regular clearance of our goods. Department has serviced us a notice that such credit can not be used as this is not a part of service used towards Input of goods produced. They have further given a show cause for penalty proceedings. Please advice the correct status.