Radhakrishnan, J.

This appeal is preferred by the Regional Director of E.S.I. Corporation aggrieved by the order of the Employees State Insurance Court in IC.No.17 of 2000 holding that the incentive payment made by the applicant is in the nature of a gift and therefore cannot be treated as wages as defined in section 2(22) of the E.S.I. Act and no contribution can be demanded on such payment.

2. Respondent herein filed application before the Insurance Court assailing Ext.A3 order dated 28-2-2000 issued under Section 45-A of the ESI Act by which contribution was assessed on alleged omitted wages coming under the heads repairs/maintenance and incentive. Hotel Alukkas is an establishment covered under the Employees State Insurance Act, which was required to pay contribution in accordance with Section 40 of the Act read with Regulations 29 and 31 of the ESI (General) Regulation 1950. Since the employer had failed to pay contribution as required by law, a notice was issued to the employer by the Regional Office of the ESI Corporation vide their letter dated 18-11-1999 to show cause why contributions as per statement enclosed therein should not be finally determined under secti