The employer must provide clear evidence to substantiate claims regarding the nature of payments made to employees, and failure to do so allows the ESI Corporation to determine contributions based on available information.

JUDGMENT

K.S.MUDAGAL, J.

Challenging the dismissal of it's application under Sec. 75 of the Employees State Insurance Act, 1948 ('the Act' for short), the applicant in ESI Application No.19/2002 on the file of the Employees State Insurance Court, Bengaluru ('ESI Court' for short) has preferred this appeal. By the impugned judgment and order, ESI Court has rejected the application of the appellant for declaration that it is not liable to pay contribution of Rs.65, 20, 855.18 determined by respondent No.1.

2. The brief facts of the case are as follows: The appellant is engaged in providing Security Services to various clients across India and is covered under ESI Act. During the course of its business, the appellant has employed several workmen as security guards. Appellant is liable to contribute to the Employees State Insurance Funds, the employers share of contribution.

3. On 3/8/2000, 29/8/2000, 12/9/2000 and 13/9/2000 the Inspector of the Corporation visited the appellant's establishment at Bangalore and demanded for production of records for verification of contributions. After inspection, the ESI Inspector issued observation slip dtd. 13/9/2000. As per the Inspector's observation, the appellant was paying overtime wages to its employees in the disguise of conveyance allowance to avoid payment of ESI contribution and had not accounted that for ESI contribution.

4. The appellant by letter dtd. 29/8/2000 addressed to the respondents sought time for production of the documents to substantiate that what was paid was only conveyance allowance, on the ground that its establishments are spread over across India, therefore it needs time to consolidate all those documents such as cash vouchers, bank vouchers, travel vouchers and invoices and submit the same.

5. Respondent No.1 served notice on 19/10/2000 to the appellant claiming that as per their calculation, the appellant was liable to pay Rs.65, 20, 855.00 as ESI contribution in respect of it's employees and called upon the appellant to show cause why the said amount shall not be recovered. The appellant attended the hearing on 20/11/2000 and requested for time to produce the documents. Thereafter, the appellant did not produce the documents. Ultimately, the respondents passed order under Sec. 45A of the Act on 8/2/2002 determining that the appellant is liable to pay Rs.65, 20, 855.00 towards contribution on overtime wages of its employees.

6. On 20/2/2002, the appellant wrote a letter to the respondents claiming that the notice dtd. 22/11/2001 notifying the hearing date on 21/12/2001 was not served on it. Ultimately appellant filed application before the ESI Court for setting aside the order dtd. 8/2/2002 and to declare that it is not liable to pay the amount determined by the respondents. In the application, the appellant contended that the amount reflected under the head overtime wage was payment towards conveyance allowance of the employees and that was not the overtime wages. The appellant further contended that it was not given reasonable opportunity of hearing. The appellant further contended that the notice of hearing was not served on it. On such grounds, the appellant sought for quashing of the order under Sec. 45A of the Act.

7. The Corporation contested the application of the appellant on the ground that the payments reflected in wage register under the head overtime wages was towards the overtime wages of the employees itself. It was further contended that the said amount was camouflaged by mentioning that, as conveyance charges. The Corporation further contended that though the appellant was given sufficient opportunity to establish its contention that whatever was paid was conveyance charges, the appellant did not avail such opportunity. It was contended that the appellant failed to establish its contention that the amount shown in the register was in fact the conveyance charges. The allegation that reasonable opportunity was not given to the appellant was denied.