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 section 45-A of the Act and recovered under section 45-G to 45-I of the Act. Employer replied to the notice stating that the work undertaken by the employer for maintenance of air conditioner, fridge etc. would fall outside the provisions of the Act and the incentive paid would not fall within the meaning of wages under the Act since it was in the nature of a gift to employees. Objection filed by the employer was rejected by the Corporation and final order under section 45-A dated 28-2-2000 was issued directing the employer to pay contribution totaling to Rs.29,422/- for the period from April 1994 to March 1996 with interest.

3. The employer aggrieved by that order approached the Employees Insurance Court. With regard to the claim made under the head repairs/maintenance, Insurance Court took the view that repair of air conditioners, fridges, automobile, TV etc. were technical in nature and even if those technical works were carried out in the premises of the applicant it would not be possible either for the applicant or his hotel employees to supervise such highly skilled works and in the absence of any supervision, the applicant could not be treated as the principal employer in relation to the employees who were engaged by the third parties to carry out the above works. Insurance Court therefore held that there was no justification in demanding contribution on the amount paid for such works. We fully endorse the view taken by the Insurance Court that there is no justification in demanding contribution on the amount spent for repairs/maintenance etc. since those were skilled and technical works and the mere fact that those works were undertaken in the premises of the applicant it cannot be said that the applicant could be described as immediate employer as provided under section 2(13) of the E.S.I. Act.

4. We are now concerned with the question as to whether ESI Court was justified in holding that incentive payment effected by the employer to the employees could be treated as a gift and therefore would not fall within the definition of wages under section 2(22) of the ESI Act.

5. ESI Corporation had conducted inspection of the premises of the hotel and the tourist home. It was noticed that an amount of Rs.3,23,585/- was paid as incentive to the employees of the hotel and Rs.1,01,355/- was paid as incentive to the employees of the Tourist Home for the period 1994-96. It was noticed that a total amount of Rs.4,24,940/- was found omitted from payment of contribution. Applicant was therefore directed to pay contribution on the above omitted wages at the rate of 5.5% which works out to Rs.23,372/-. On the basis of the above mentioned report the Corporation issued the order under section 45-A of the Act, which were challenged before the Insurance Court. Before the