MANJULA CHELLUR, J.

( 1 ) THIS appeal is filed challenging the orders of E1 Court in ESI Application No. 166/90.

( 2 ) IN brief the facts that led to the filing of the appeal are as under: the respondent herein was the applicant before the E1 Court. The corporate office of the respondent-applicant was originally at Madras, which was shifted to Bangalore in June 1988. The filter division of the company is at bangalore and Engineering Division is at coimbatore. All the cash books and ledgers were maintained in the Head Office at Madras earlier. The Inspector of the appellant inspected the books of amounts in Madras in the year 1986. Subsequently a notice was sent to applicant-respondent dated July 31, 1990 demanding contributions in respect of professional charges and also on the cost of paints and other materials that were left out. According to the respondent it was not liable to pay contributions as demanded and however, a personal hearing was fixed to hear the applicant in person.

( 3 ) ACCORDING to the respondent in view of section 77 of the Act, ESI Corporation cannot claim time barred contributions i. e. , after a period of 5 years. However, the ion passed an order levying contribution of Rs. 16,907. 00. The contribution demanded was for the period between 1975-85. The impugned order was challenged by the respondent-applicant before the E1 Court wherein the appellant-Corporation filed a detailed objection statement contending that subsequent to amendment of the Act in 1989 question of the demand being time barred does not arise. Even otherwise the demand for contribution is the period prior to 1989 amendment. However, the E1 Court took a view that the issuance of observation slip dated february 21, 1990, which is marked at Ex. R1 and by that time the Act was amended relating to limitation. Therefore, it held the claim for contribution beyond 5 years from February 21, 1990 was clearly time barred. It also held that the claim of the Corporation was not totally wrong because at the time of inspection it was noticed that contributions were not paid on miscellaneous expenses like repairs, maintenance of machinery, repair and maintenance of buildings, transport charges, which do have labour component apart from material component. In other words, according to the El Court the claim of the appellant was not totally wrong but it was time barred. Aggrieved by the said order, the present appeal is filed challenging the orders of the E1 Court on several grounds. The main ground of attack is with regard to limitation. According to the appellant-Corporation amendment has come into force in the year 1989 and therefore the provision regarding limitation does not apply to the contribution, which was due for the period 1975-85.

( 4 ) ACCORDING to the learned counsel for the respondent herein the show cause notice is dated February 21, 1990, subsequent to the amendment. Therefore, the claim beyond 5 years is time barred. He further brought to the notice of the Court Regulation 32. 2 of the Act wherein there is obligation on the employer or the management to maintain records only for 5 years.

( 5 ) ON hearing the contentions of both the parties the substantial question which arises for court's consideration in this appeal are: "whether Section 77 (1) (A) of the ESI Act is applicable to the case on hand and what order?"

( 6 ) THE learned counsel for the appellant relies on the following citations: l. FJR Vol. 56. 490 2. AIR 1997 SC 2441 3. 1997 - II-LLJ-366 (SC) 4. 1997-III-LLJ (Suppl) - 1208 (SC) 5. 1998-I-LLJ-1190 (Ker) 6. 1997-III-LLJ (Suppl)-l 127 (Kant)

( 7 ) ADMITTEDLY, the claim made by the ESI corporation is for the period between January 1975 to January 1985. As per the observations of the Inspector on January 22, 1990 a letter was issued to the respondents herein claiming the contribution. A show cause notice was then issued on July 31, 1990.

( 8 ) IT is not in dispute that a personal hearing was afforded to the respondent herein on

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