Procedure to approach Central Board of EPFO requesting waiver of penal damages and interest

One of our client has made delay in the epf contribution payments. Now the client has received a notice from EPF office insisting to make the penal damages and interest thereon. As per Section 14B central board has power to waive off the penal damages. Please tell me the procedure to approach the Central board of EPFO.

The proviso to section 14B says that:

" Provided further that the Central Board may reduce or waive the damages levied under this section in relation to an establishment which is a sick industrial company and in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985,subject to such terms and conditions as may be specified in the Scheme."

This clearly states that the Central Board shall waive or reduce the damages only if the establishment concerned is a sick unit as declared by the Board for Industrial and Financial Reconstruction. As per scheme 32B of the Employees Provident Fund Schemes, complete waiver is available if the establishment is a sick unit. Follow the scheme:

"The Central Board may reduce or waive the damages levied under section 14B of the Act in relation to an establishment specified in the second proviso to section 14B, subject to the following terms and conditions, namely:

(a) in case of a change of management including transfer of the undertaking to workers' co-operative and in case of merger or amalgamation of the sick industrial company with any other industrial company, complete waiver of damages may be allowed;

(b) in cases where the Board for Industrial and Financial Reconstruction, for reasons to be recorded in its schemes, in this behalf recommends, waiver of damages up to 100 per cent may be allowed;

(c) in other cases, depending on merits, reduction of damages up to 50 per cent may be allowed.

Thank you so much Mr. Madhu TK for you timely reply. Should we approach the jurisdictional office, requesting them to reduce the PD and then if in case the jurisdictional officer refuses reduce the PD, then should we have to approach the Central board ?

If you are a unit declared as sick then there will be available a scheme of rehabilitation by BIFR. You can submit these papers before the Asst. PF Commissioner at the time of your hearing (under 14B) on the scheduled day and he will refer the same to the Central Board.