P. Somarajan, J.

This appeal is preferred against the judgment dated 19.8.2010 in I.C.No. 54/2008 on the file of Employees' Insurance Court, Alappuzha, by the E.S.I. Corporation, who is the respondent in the original application. The original application was filed under Section 75 read with section 77 of the Employees' State Insurance Act, 1948 (for short 'the Act'), seeking a declaration that the assessment and demand of Rs. 1,29,921/- towards ESI contribution against the applicant for the periods of 1997-1998, 1999-2000 and 2000-2001 is unsustainable.

2. The case of respondent is that their establishment was engaged in the business of exporting of processed materials such as Dry Ginger, Black Pepper, Turmeric etc. and they had entered into a contract with another firm M/s. Varun Agro for the supply of the above processed materials and the materials so processed were exported by the applicant. The respondent paid the charges for supplying the processed products to M/s Varun Agro under the heading of processing charges. So, the case advanced by the respondent is that the processing charges would not constitute wages for the purpose of contribution. It is also alleged that t