Hi Mrudula,
The HTTP code 500 is not a problem that is perfectly fine.
The HTTP destination is required for the following reasons-
you can choose URL address, but in that case anybody with access to Integration directory can do a change. So if you have this in nwa, only a admin access do changes to the destination. Provides more reusability and security.
ofcourse you can do it without http destination.
Regards,
Vikas