When is Credit on Input Service to be reversed?

If the payment not made within 3 months from the date of Invoice, then Credit needs to be reversed.

However, if later payment made, then again credit can be taken.

Note:-

Credit need not be reversed in case service tax paid by service receiver under reverse charge/partial reverse charge.

Proportionate Amount reversed on partial payment

If any amount refunded by service provider/credit note received from service provider, then Cenvat Credit earlier taken on such amount of credit note/refund to be reversed

How is Amount paid under Rule 4?

It can be paid by manufacturer either by

debiting the CENVAT credit

or

Actual paymebt by GAR-7 Challan

Due date is same as that of normal service tax challan payment.

If amount not paid, it will be deemed that Cenvat credit is wrongly taken and it shall be recovered as per Rule 14.