( 1 ) THE Regional Director, E. S. I. Corporation appellant, original opponent, has filed this First Appeal under Section 82 of the Employees State Insurance Act (hereinafter referred to as "the Act") against judgement and award dated 27. 4. 2001 passed by the E. I. Court in E. S. I. Application No. 80 of 1989. The learned judge by the impugned judgement quashed and set aside demand letter dated 4. 5. 1989 claiming Rs. 2,19,245. 00 Insurance amount on the cost of construction and profit of contractor under Section 2 (22) of the Act.

( 2 ) THE facts giving rise to this appeal are as under:2. 1 patel Printing Press, respondent, original applicant was carrying on business at Ahmedabad. The respondent has its own building where it carries on business of printing press. It is the case of the respondent that it has one building and another it has acquired which was originally rented to the tenant. However, the building was in a dilapidated position and therefore it decided to renovate the same and put up a new construction in this behalf. In view of the same, the respondent has almost constructed a new building and spent about Rs. 2,19,245. 00 towards cost of construction. The said cost includes value of building including the amount paid tothe contractor which necessarily include a margin of profit of the contractor also. 2. 2 petitioner further submitted that after construction of the said building again the respondent started business of printing in the building. It is the case of the respondent that the officer employed under the provisions of the Act visited the premises of the respondent on 9. 1. 1989 and thereafter prepared a report. In the said report it was observed that the respondent has paid Rs. 1,36,410. 22 to Octava Builders towards labour contractor bills. The respondent has also paid Rs. 30,727. 77 ps to Mohanbhai Bhagirthji Mistry for labour work bill, furniture and fixtures, Rs. 2000. 00 paid to Jagdish Gordhan Rathod for cabin polishing work, Rs. 5001. 00 paid to Kaniyalal M. Sharma for tile polishing and fixing labour, Rs. 7,047. 70 paid to Mithulal R. Chauhan for plaster of paris work, Rs. 24,140. 58 paid to Pal Enterprises towards oil paint, whitewash charges, colour charges, Rs. 10,711. 00 paid to Paresh contractor for plumber work, Rs. 3,205. 53 paid towards flooring and fitting charges. According to the learned counsel for the E. S. I. Corporation as the said amounts / wages falls within the provisions of Section 2 (22) of the Act paid in connection with the work of the factory, contribution may be recovered. 2. 3 in view of the said report, the Assistant Regional Director addressed a letter dated 4. 5. 1989 to the respondent. The respondent has neither paid the dues nor submitted compliance report in this behalf. On 6. 10. 1989 the Deputy Regional Director has stated that ESI contribution is chargeable on Rs. 2,19,245. 00 as this amount is utilised for extension/renovation of premises and also debited to factory account as construction cost which falls under Section 2 (22) of the Act. In view of the same, the respondent is directed to pay Rs. 2,19,245/- to ESI Corporation immediately and submit challan in this behalf. 2. 4 the respondent thereafter replied by its letter dated 10. 6. 1989 stating that the said amount pertains to cost of building and therefore they are not liable for the same. The entire amount pertains to building cost.

( 3 ) BEFORE the authority Shri Rajendra Manubhai, Manager of the respondent was also examined. He has deposed that Rs. 2,19,000. 00 pertains to cost of raw material, building material and contractors profit. This is a new building which the respondent is going to use for the first time.

( 4 ) ON the aforesaid basis the learned judge has examined all contentions including bills of municipal Corporation and necessary plan which are approvd by the municipality by which the respondent is decided to use the building. The learned judge, therefore, held that amount o