Tag Archives: Amnesty

On Amnesty Scheme 2014: Part – III

(This part of the article visualizes the scenario in the Regional Offices, consequent to the directions given in Para A- 2 (iv), (v) and (vi) of the Hqrs. letter dated 03.03.2014 on the Amnesty Scheme-2014. Para 2 (iv) deals with the settlement of cases pertaining to omitted wages on which contribution had been determined by the ESIC authorities.)

An employer approaches the Branch Officer of the Insurance Branch in a Regional Office in the chamber of the latter. The Branch Officer offers the employer a seat and asks him what the matter is.

Employer: My factory remains covered under the ESI Act for a very long time. But, during the last inspection, the Inspector reported that I had not paid contribution on certain items of wages. I had certain doubts. But, you had also issued orders under Sec. 45-A upholding the version of the Inspector and disagreeing with my statements of defence against such assessment, during personal hearings.

Branch Officer: Okay, what did you do then?

Employer: I went to the E.I. Court against your orders. But, he Court had also upheld your orders. I appealed against it. The matter is now pending in the High Court. I am informed that the ESI Corporation is providing a solution, now, through certain Amnesty Scheme. I would like to know whether I could get relief through it.

Brach Officer: Yes, you are welcome. Your case falls within Para A. 2 (iv) of the Hqrs. instructions dated 03.03.2014.

Employer: I have already paid contribution as per the entries in the Reg. 32 Register. This assessment in question has been made on omitted wages which I had not taken into account for calculation of contribution. You have assessed that contribution as Rs. 4,00,000/-. As the E.I. Court has also upheld your order, if I am to pay the contribution now, I must pay Rs. 4 lakhs and interest for the entire period including the period of litigation. In the normal course, the period of litigation is exempted only for calculating the quantum of Damages. How much should I pay now under the Amnesty Scheme?

B.O: You have to pay contribution which “shall not be less than 30% of the assessed amount of contribution”. Secondly, you have to pay the interst in full, of course, only with reference to that 30%. Thirdly, you will not be levied any Damages at all.

Employer: What? Did I hear right? Did you say that I had to pay not less than 30% of the assessed amount? Is it true that the choice is left to me to decide the quantum of contribution payable?

B.O: Yes, the instructions literally mean so.

Employer: Sir, I am very lucky then. I shall pay that amount today itself and get my case settled.

B.O: No, you have to get the permission of the High Court to settle the matter out of court. You have to opt for a solution under the Amnesty Scheme only thereafter.

Employer: Okay, I shall take steps immediately. But, still, I do have certain doubts.

B.O: What are they?

Employer: Will you ask me to produce records maintained under Income Tax Act?

B.O: No, all the relevant records had already been verified, even before I issued orders under Sec. 45-A. There is no question of verifying the records once again.

Employer: But, I am told that you are calling for records.

B.O: No. That is only in respect of cases in which contribution had been determined on Assumed Wages. But, in your case, contribution had been determined on the basis of your records and after hearing you. In fact, your records have been verified twice, once by the SSO and again by me. Besides, the E.I. Court has already given its stamp of approval of the legitimacy and legality of the assessment thus made. There is nothing for us to verify your records once again.

Employer: Oh, Thankyou very much! I shall make use of this Scheme without fail. …. Sir, may I ask you one more thing?

B.O: Yes. You can.

Employer: When will there be the next Amnesty Scheme?


Employer: Because, I am not paying contribution on many items of omitted wages, at present, too. I shall keep the issue pending that way, in spite of inspection by the SSO, in spite of your hearings and 45-A orders and in spite of verdicts in your favour by the E.I. Court and even the High Court, so that, at a later date, when you bring out another Scheme for Amnesty, I could pay only 30% of it with Interest and without Damages and finish off the matter. This provision emboldens us to evade the payment of contribution in time on all items of wages under Sec. 2 (22) and escape even normal liability.

The Branch Officer remains silent.

Employer: Oh, what an easy way out! The Amnesty Scheme of 2006 was rightly and only for Sec. 85 cases. But, the Amnesty Scheme of 2008 brought into picture the Sec. 75 cases but said that the entire amount of contribution had to be paid, as per the 45-A orders. Interest had also to be paid in full. There was only some relief in Damages. That way, that circular was also providing relief essentially under Sec. 85 only.

But, your Amnesty Scheme 2010 was a landmark. It introduced the concept of payment of 30% of the assessed dues. And, no penalty in the form of Damages. What a joy! This Scheme opened to the defaulters, the Door of Escape, very wide and the present scheme is also doing the same. This would make the benefit provisions also unattractive to the workforce, as the quantum of cash benefits depends only on the small amount of contribution we pay. There would, therefore, be no malingering and false certification too.

I only pray that every department of the Government of India emulates ESIC and rewards the erring assesses by recovering only 30% of the dues legally payable by the employers who turn out to be defaulters by not paying the dues in time. See you later, Thankyou!

The employer departs. The Branch Officer continues to remain in a pensive mood.





Filed under Amnesty