JUDGMENT : The appellant-firm was engaged in the processing of grey cotton fabrics. On 19th April, 1974 Central Preventive Office of the Central Excise, Kanpur, paid a visit to the appellant's premises. It found that the appellant was engaged in the processing of cotton canvas and duck cotton fabrics with the aid of power. Show cause notice was, therefore, issued to the appellant on 15th October, 1974 for contravention of provisions of Rules 173B, 173C, 173G, 52A, 53, 9 and 173F read with 173Q of the Central Excise Rules, 1944. It was alleged that the appellant had processed canvas and duck cotton fabrics with the aid of power during the period from 1st April, 1973 to 31st March, 1974 and had cleared the goods without applying for Central Excise licence or submitting any classification list or the price list. In reply the claim of the Department was contested and it was alleged that the appellant had not used power in the process of cotton fabrics and their jigger and padding mangle were manually operated. The explanation was rejected by the Collector of Central Excise and it was held that the appellant was engaged in the processing of cotton fabrics falling under Central Excise Tariff Item 19-I(1) and 19-I(2) with the aid of power and steam and even if it was held that the power was not used it was established that the fabrics were processed with the aid of steam, therefore, the differential duty was liable to be paid by the appellant. The order was affirmed in appeal. In further appeal the Tribunal held that there was no evidence to prove that the appellant had used power in processing the fabrics. But it held that the appellant having admitted that it was using steam for purpose of heating of dye and wax solution it was apparent that the processing was done with the aid of steam. 2. It cannot be disputed that the appellant was entitled to claim exemption from payment of duty only if it was held that the processing of the fabric was not done with power and if it was done with steam then the cloth was coarse. The claim of the Department that power was used in processing was not accepted by the Tribunal. Yet it upheld the appellate order as the cloth used was not coarse and the processing was done by steam. The claim of the Department that power was used in processing was not accepted by the Tribunal. Yet it upheld the appellate order as the cloth used was not coarse and the processing was done by steam. Whether the cloth used was coarse or fine is a question of fact. In any case, the finding of the Tribunal being based on statement submitted by the appellant to the banker that the cloth was not coarse cannot be said to suffer from any error of law. As regards the finding on use of steam for processing it is true that it was not mentioned in the show cause notice but the appellant having admitted that it had used steam in boiling the dye etc., it cannot be said that the Tribunal could not have recorded the finding that the appellant had processed the cloth with steam. On merits, therefore, the finding is not liable to be set aside. 3. Nor is there any merit in the submission that the notice issued by the Department was barred by time. However, once the Department found that the appellant had not used the power in processing the fabrics and there was no mention in the show cause notice that the appellant was using steam and the claim of the appellant has been rejected because of his own admission, it was a case in which a lenient view should have been taken so far the penalty is concerned. 4. Therefore, in the peculiar facts and circumstances of this case we are of opinion that the appeal is liable to be allowed in part and the amount of penalty stands reduced to Rs. 5,000/-. 5. We are informed that the Collector had granted time for calculation of duty etc. which expired long ago. Therefore, if details have not been worked out and the appellant has not furnished the information as yet, it may furnish now. The time to comply with the order of the Collector is extended by a period of two months from today. 6. Parties shall bear their own costs.