Since the parties to these two first appeals are common and since these first appeals arise out of the order passed by the E.S.I. Court, Nagpur, on 30th October, 2006, they are heard together and are being decided by a common judgment.

2. A few facts giving rise to these first appeals and to the controversy involved therein are stated thus; Instead of referring to the parties as appellant and respondent, it would be convenient in this case to mention them as the employer Hotel and the Corporation. The Inspector of the Corporation visited the unit of the employer Hotel on 21/7/1997 and observed that the employer Hotel was engaged in the business of lodging and providing tea, snacks and cold-drinks to the customers. It was further observed by the Inspector, as is stated in the order under Section 45-A of the E.S.I. Act, 1948, that the employer Hotel was using one oven, L.P.G. Cylinder, a fridge, water-cooler and air conditioners to provide services to the customers. It was also observed that the number of employees working with the employer Hotel at the relevant time was eleven. The Corporation believed that the employer Hotel fulfilled the required conditions necessary for the coverage under the Act and, therefore, provisionally declared that the employer Hotel was covered under Section 2(12) (a) of the Act, with effect from 1/4/1993. The aforesaid communication dated 21/8/1997 was acknowledged by the employer Hotel but it failed to comply with the statutory provisions of the Act which included the payment of regular contributions. The employer Hotel was given a personal hearing in the matter and after considering the representations and the explanation submitted by the employer Hotel, the order under Section 45A of the E.S.I. Act 1948 was passed on 30/1/2003.

3. It is observed in the order that the registration of the employer Hotel was initially done under the Bombay Shops and Establishment Act, 1948, as a Restaurant. But the employer Hotel subsequently managed to change the nature of the business from Restaurant to a Residential Hotel so as to avoid statutory liability of payment of contribution, filing of returns, etc. In the order under Section 45A, it was observed that the employer Hotel was using air conditioners from 1993 onwards along with electronics appliances such as Aqua-Guard, E.P.B.X., television, boiler, lift, submersible pump set, dish antenna/Star T.V., informatics electronics devices for killing flies and mosquitoes and fridge, and the use of the aforesaid devices amounts to Manufacturing Process within the wider meaning of the term as envisaged under Section 2 (k) of the Factories Act, which has been adopted in E.S.I. Act, 1948 under Section 2(14AA) which defines manufacturing process. It was observed by the Corporation that the employees working in the employer Hotel were more than ten and hence the provisions of section 2(12) of the E.S.I. Act were attracted. The employer Hotel was, therefore, ordered to pay the contribution amounting to Rs. 75,596/- within a period of fifteen days from the date of the order.

4. The employer Hotel challenged the order passed under Section 45A of the E.S.I. Act, before the Employees State Insurance Court, Nagpur, in Application (ESI) No. 1/2003, under Section 75 of the Employees State Insurance Act. The Employees Insurance Court, Nagpur, however, by the judgment and order dated 30th October, 2006, allowed the appeal filed by the employer Hotel and set aside the order passed by the Corporation under Section 45A of the Act. The matter was remanded to the competent authority under the E.S.I. Act for reconsideration of the same by giving opportunity to the employer Hotel to produce evidence in case it was found necessary. The judgment passed by the E.S.I. Court on 30th October, 2006 is challenged by the Corporation as well as the employer Hotel in these two first appeals.

5. It is submitted by Mrs. Maldhure on behalf of the Corporation that the Employees Insurance