1. Substantial question of law involved in this appeal is as follows :

"Whether the exemption granted vide Government Notification, issued under section 88 read with section 91A of the Employees’ State Insurance Act, 1948, in respect of establishment of the Apex body of a Cooperative Marketing Federation Limited, would be applicable and valid so as to claim exemption from payment of Employees State Insurance (ESI) contribution in respect of other units of the Co-operative Marketing Federation ?"

2. By consent, the appeal is finally heard at stage of admission.

3. The appellants filed an application under section 75 read with sections 77 and 78 of the Employees’ State Insurance Act, 1948 (hereinafter referred to as "the ESI Act"), before the Industrial Court, Aurangabad. The applicant No. 1 is a registered Cooperative Society under the Maharashtra Cooperative Societies Act, 1960 and the appellant No. 2 is a unit dealing in manufacturing of granulated fertilizers at its factory situated within the industrial area of Chikalthana (Aurangabad). They asserted that the appellant No. 2 is not required to contribute for ESI amount under the ESI Act in as much as the State of Maharashtra has exempted the appellant No. 1 from application of the ESI Act vide notification dated 28th April, 1992 with effect from 1st February, 1996. They further asserted that the competent officer of the respondent visited the factory of the appellant No. 2 and noticed nonpayment of contribution of the ESI amount. By communication dated 30th July, 1993, the respondent directed payment of certain amounts towards contribution of the ESI. The appellant No. 2 raised certain objections vide communication dated 11th August, 1992. It was asserted that the construction work at the factory was carried out by contractors and the employees engaged for said work were under the domain of such contractors. It was contended that the appellant No. was not the principal employer in relation to those employees who worked for the construction work. The respondent No. 2 - the Recovery Officer, by order dated 6th August, 1993, called upon the appellant No. 2 to pay an amount of Rs. 42,56,927/- towards the ESI contribution. The appellant No. 2 informed, vide letter dated 19th August, 1993, that there was exemption available from payment of the ESI contribution with effect from 1st February, 1996 in accordance with the Government Notification dated 28th April, 1992 and, therefore, urged for withdrawal of the notice of recovery. Subsequently, by order dated 12-11-1993, again the respondent called upon the appellant No. 2 to make payment of Rs. 5,19,337/- which was finally determined and that of interest amount of Rs. 22,839/-, for period till end of December, 1993.

4. Being aggrieved by the said order and the communication pertaining to recovery of ESI contribution, the appellants filed an application before the Industrial Tribunal seeking quashing of the recovery order and the demand notice issued by the respondents.

5. By their written statement (Exh-10), the respondents resisted the application. They asserted that the exemption granted vide notification referred by the appellants is only limited to the extent of the Head Office at Mumbai and it does not cover the factory unit at Aurangabad. They contended that the factory unit at Aurangabad is a separate legal entity and is liable to contribute towards the ESI contribution in respect of the employees working on its Establishment. They came out with a case that the appellants have attempted to misconstrue the Government Notification. They, therefore, supported the order issued in respect of recovery of the ESI contribution amount. It is the case of the respondent that a separate Code was assigned to the appellant No. 2 and the appellant No. 2 was required to furnish details of the wages and deductions of the ESI contribution. The appellant No. 2 did not submit proper returns. The appellant No. 2 had paid certain contribution a