This appeal is filed under Section 82(2) of the Employees State Insurance Act, 1948 (for short, `the ESI Act) by the ESI Corporation against the order dated 4-9-2004 passed by the Presiding Officer, Labour-cum-ESI Court, Mangalore in ESI Application No. 7 of 2003 allowing the said application filed by the respondent herein under Section 75(1)(g.) of the ESI Act and declaring that the provisions of ESI Act are not applicable to the establishment of the respondent herein and therefore the respondent herein is not liable to pay the demands made by the Corporation in its various demand notices.

.2. The respondent herein is Anantha Padmanabha Mills, Kulshekar, Mangalore, a partnership firm. It is undisputed facts that on 12-1-1996 the Inspector attached to the ESI Corporation in exercise of his powers under Section 45 of the ESI Act inspected the respondent-establishment. According to the Inspector, at the time of inspection, he found 10 persons working in the establishment. The perusal of records, according to the Inspector, indicated that during the month of May 1990, there were 10 employees working in the establishment. Thereafter, one of the partners of the respondent-firm submitted Form 1 on 13-3-1996, wherein he stated to have shown the number of employees employed in the establishment during May 1990 as 10. Therefore, the Inspector served the order dated 13-3-1996 issued by the Deputy Director on behalf of the Regional Director of ESI Corporation to the effect that the respondent-establishment is covered under the provisions of the ESI Act and that the respondent is required to submit the periodical returns and pay ESI contributions. There is no dispute that the respondent received the said order. After the receipt of the said order, it is undisputed that the respondent filed an application before the ESI Court under Section 75 in ESI Application No. 7 of 1997 questioning the coverage of the establishment under the provisions of the ESI Act. The ESI Corporation appeared in the said application and contested the said application. However, the ESI Application No. 7 of 1997 came to be dismissed for non-prosecution on 9-1-2001. Thereafter the authorities of the ESI Corporation passed an order under Section 45-A of the ESI Act demanding the respondent to pay the contributions, interest etc., from 28-5-1990. The said order under Section 45-A of the ESI Act was passed on 13-1-2003. Upon service of the copy of the order under Section 45-A of the ESI Act, the respondent filed ESI Application No. 7 of 2003 under Section 75(1)(g) of the ESI Act seeking declaration that the provisions of ESI Act are not applicable to its establishment and consequently to hold the demands made by the Corporation as not maintainable and for setting aside the demands so made by the Corporation. This application was contested by the Corporation inter ilia contending that the second application filed on behalf of the establishment is barred by principles of res judicata as the very same issue raised in this application was the issue raised in the earlier application and since the earlier application filed by respondent herein has been dismissed, the subsequent application is not maintainable. The Corporation also contested the application on merits denying the averments. The parties led evidence before the ESI Court. After hearing both sides and on assessment of oral and documentary evidence, the ESI Court by the order under appeal held that the provisions of ESI Act are not applicable to the respondent-establishment as at no point of time the respondent-establishment had engaged 10 or more employees. Consequently, the ESI Court set aside the demands made by the Corporation. The ESI Court recorded a finding that the second application is not barred by res judicata as the earlier application was not decided on merits.

3. Beingaggrieved by the said order of the ESI Court, the Corporation has presented this appeal.

4. Upon service of notice of this ap