9911796707
TMI Blog2007 (12) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... the 'Act'). Order passed by the ESI Court was on the petition filed under Section 75of the Act. 2. Background facts are as follows: A show-cause notice was issued by the respondent on the report of the ESI Inspector on 9.1.1981 calling upon the appellant to contribute premium for the period November, 1986 to November, 1987 in respect of service charges collected by it. Not being satisfied with the explanation offered, order was passed under Section 45-Aof the Act determining amount of contribution payable. The order was challenged by the appellant by an application under Section 75of the Act. This application was contested by the respondent and the ESI Court on consideration of the evidence brought before it and it came to hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were distributed equally amongst all the employees periodically, once in three months. It was submitted that by a circular it was clarified that service charges were outside the scope of wage as defined. Reference was made to a decision of this Court in The Rambagh Palace Hotel, Jaipur v. The Rajasthan Hotel Workers' Union, Jaipur (1976 (4) SCC 817). The High Court distinguished the same holding that it related to "tips" and there was no consideration of the aspect whether it was covered by the expression "reimbursement". 5. It was pointed out that the judgment of the High Court was delivered on 29.7.1999. Subsequently, the memorandum was issued by the Corporation bearing No.P-1/13/97-Ins.IV dated 6.11.2002 clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of their employees in lieu of direct tips and the same is paid to their employees . at a later date. Such amount collected as 'service charges' will nott constitute wages under S 2(22) of the ESI Act. In the case of ESIC v M/s Rambagh Palace Hotel, Jaipur. The High Court of Jaipur has held that 'service charges' are not wages under Section 2(22) of the ESI Act. This verdict of the High Court of Jaipur was accepted in the ESIC and Hence no contribution is payable on 'service charges'. (Earlier instructions were issued vide letter No. P. 12/11/4/79 Ins. Desk I dtd.18.9.79)" 9. The introduction to the memorandum dated 6.11.2000 states that it has been issued because: "it is necessary that the instru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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