tured sugar, or an article processed wholly or partly therefrom, is exported or shipped has the primary right to claim the export payment provided for in section 3493 (a) of the Internal Revenue Code, as amended. Such person may, however, waive any claim thereto in favor of the shipper or the manufacturer, in which case the shipper or the. manufacturer, as the case may be, will be recognized as the proper claimant. A waiver in substantially the following form shall be used:

the consignor (s) named in the bill of lading to which this waiver is affixed or attached, do(es) waive in favor of (shipper) (manufac

turer) any claim for payment allowable under the provisions of section 3493 (a) of the Internal Revenue Code by reason of the exportation or shipment of the articles described in such bill of lading, and state(s) that such party is the actual shipper or the actual manufacturer of the article or articles exported.

(Consignor named in the bill of lading) [T. D. 5021, 5 F. R. 4610]

§ 312.301 Claim for payment. Claim for an export payment shall be executed by the claimant on the form prescribed by the Commissioner in accordance with the instructions contained thereon and in accordance with the regulations in this part. The claim shall be filed with the collector of internal revenue for the district in which is located the principal place of business of the claimant. If the claimant has no principal place of business in the United States, the claim shall be filed with the collector of internal revenue at Baltimore, Md.

§ 312.302 Proof of exportation or shipment. No export payment shall be allowed unless the claimant establishes actual exportation to a foreign country or shipment to a possession. Exportation to a foreign country or shipment to a possession may be evidenced by (a) a copy of the export bill of lading, or (b) a certificate by an agent or representative of the carrier showing actual delivery of the manufactured sugar or articles in a foreign country or a possession of the United States, or (c) a certificate of landing signed by a customs officer of the foreign country to which the manufactured sugar or articles are delivered, or (d) if such foreign country has no customs administration, or in the case of shipment to a possession, a sworn statement of the consignee show

ing receipt of the manufactured sugar or articles.

§ 312.303 Limitations on allowance— (a) Time for filing claim. No export payment shall be allowed unless claim therefor is filed by the person entitled thereto within 2 years from the date the right to such payment accrued. The right to payment accrues as of the date the articles are exported.

(b) Drawback of duty. No export payment is allowable with respect to any manufactured sugar, or article manufactured wholly or partly from manufactured sugar, upon which through substitution or otherwise a drawback of any tax paid under section 3500, I. R. C. (import compensating tax) has been or is to be claimed under any provision of law made applicable by section 3501, I. R. C. [Regs. 99, 2 F. R. 2677, as amended by T. D. 5021, 5 F. R. 4610]

SUBPART D-LIVESTOCK FEED AND
DISTILLATION PAYMENTS

§ 312.400 Filing of claim. Any person using any manufactured sugar, or an article manufactured therefrom, with respect to which a tax has been paid under section 3490, I. R. C., as (a) livestock feed, (b) in the production of livestock feed, or (c) for the distillation of alcohol, may file a claim for payment of the amount of tax paid. The claim for payment shall be executed by the claimant on the form prescribed by the Commissioner, in accordance with the instructions contained thereon, and in accordance with the regulations in this part. The claim shall be filed with the collector for the district in which is located the principal place of business of the claimant. If the claimant has no principal place of business in the United States, the claim shall be filed with the collector at Baltimore, Md.

§ 312.401 Proof of claim. No claim for payment under section 3494 (a), I. R. C., will be allowed unless the claimant establishes to the satisfaction of the Commissioner (a) that the tax with respect to the manufactured sugar upon which the claim is based was actually paid; (b) that the manufactured sugar, or article manufactured therefrom, was actually used in the production of livestock feed, or as livestock feed, or for the distillation of alcohol; (c) the quantity and test of the manufactured sugar upon which the claim is based; and (d) such other facts as may be required to

determine the claimant's right to the payment.

§ 312.402 Period for filing claim. No payment under section 3494 (b), I. R. C., will be allowed unless claim therefor is filed by the person entitled thereto within 1 year from the date the right to such payment accrued. The right to payment accrues as of the date the manufactured sugar, or article manufactured therefrom, is used for one of the three purposes for which payment is allowable under the act. (See § 312.400.)

SUBPART E-ADMINISTRATIVE AND OTHER

GENERAL PROVISIONS

per

§ 312.500 Returns. (a) Every son liable for the tax shall prepare for each calendar month a return in duplicate on Form 1 (Sugar) in accordance with the instructions thereon and in accordance with the regulations in this part.

(b) A separate return shall be prepared for each collection district in which the manufacturing was done or liability for the tax incurred. That is, if the taxpayer is engaged in the manufacture of manufactured sugar (or incurs liability for tax as a manufacturer under section 3492, I. R. C.) in more than one collection district, he shall prepare a separate return with respect to the liability for the tax incurred in each such district. (See, however, § 312.501.)

(c) If, within a collection district, the taxpayer has more than one factory, refinery, or other place where he manufactures manufactured sugar, there shall be prepared and annexed to the return for such district a separate schedule for each such factory, refinery, or other place, giving for each such place the information required on Form 1 (Sugar).

(d) The return shall be under oath and verified before an officer duly authorized to administer oaths. If the amount of the tax shown by the return to be due is $10 or less, the return may be signed and executed before two subscribing witnesses instead of under oath.

§ 312.501 Time and place for filing returns. (a) The return for each calendar month shall be filed in duplicate with the collector for the district in which the manufacturing is done, or liability for the tax incurred, on or before the last day of the month following the month for which the return has been prepared. For example, the return for

the month of October, 1937, is required to be filed on or before November 30, 1937. However, the due date of the first return of tax, for the month of September, 1937, is fixed in the act as November 30, 1937.

(b) The Commissioner, on application and for good cause shown, may permit a taxpayer who is engaged in the manufacture of manufactured sugar in more than one collection district to file consolidated returns and pay the tax to the collector for the district in which such taxpayer has his principal place of business.

§ 312.502 Payment of tax-(a) General. (1) The tax shall, without assessment by the Commissioner or notice from the collector, be due and payable to the collector on the last day of the month following the month in which the manufactured sugar was sold by the manufacturer, or used by him in the production of other articles for sale. However, an exception is made with respect to the first return and payment of tax under the act: The tax with respect to manufactured sugar manufactured in the month of September, 1937, and sold, or used in the production of other articles for sale, in such month by the manufacturer, shall be due and payable without assessment by the Commissioner or notice from the collector, on November 30, 1937.

(2) With respect to manufactured sugar which has not been sold, or used in the production of other articles for sale, by the manufacturer, within 12 months from the month in which manufactured, the tax shall be due and payable, without assessment by the Commissioner or notice from the collector, on the last day of the month following the month in which such 12-month period expires.

(3) For the purpose of determining whether manufactured sugar has been sold, or used in the production of other articles for sale, by the manufacturer, within 12 months after it was manufactured, such sugar shall be considered to have been sold or used in the order in which it was manufactured.

(4) With respect to sugar which has been acquired by a person to be manufactured into manufactured sugar but which, without further refining or other improvement in quality, is sold as manufactured sugar or is used as manufactured sugar in the production of other articles for sale, the tax with respect

thereto is due and payable without assessment by the Commissioner or notice from the collector, on the last day of the month following the month in which such sugar was so sold or used. However, the due date for payment of tax liability incurred in September, 1937, is fixed as ovember 30, 1937.

Example 1. A quantity of manufactured sugar, manufactured in the month of October, 1937, is sold by the manufacturer during the month of December, 1937. The tax with respect to such manufactured sugar is due and payable on or before January 31, 1938.

Example 2. On September 30, 1938, the manufacturer still has on hand, unsold, a quantity of manufactured sugar manufactured by him in the month of September, 1937. The tax with respect to such manufactured sugar is due and payable on or before October 31, 1938.

Example 3. A quantity of manufactured sugar manufactured in September, 1937, was destroyed by fire in December, 1937, prior to a sale by the manufacturer. The tax with respect to such sugar is due and payable on or before October 31, 1938.

(b) Date of sale. Manufactured sugar will be considered to have been sold during the month in which title thereto passes from the manufacturer to a purchaser. When title passes is dependent upon the intention of the parties, which is gathered from the contract of sale and the attendant circumstances. In the absence of expressed intention or other direct evidence, the legal rules of presumption followed in the jurisdiction where the sale is made govern in determining when title passes. Generally, for the purposes of payment of the tax, manufactured sugar will be considered to have been sold during the month in which it was delivered to the purchaser or to a carrier for delivery to the purchaser.

§ 312.503 Interest on delinquent taxes. If the tax is not paid when due there shall be added as part of the tax interest at the rate of 6 percent per annum from the time the tax became due until paid.

§ 312.504 Records — (a) Inventory. Every manufacturer of manufactured sugar shall make an itemized inventory of all manufactured sugar held by him, as of the first moment of September 1, 1937. A separate inventory shall be made for each factory, refinery, or other place where such person holds or manufactures manufactured sugar, and a copy of such inventory shall be retained on the premises.

(b) Manufacturing records. (1) Every person who on and after September 1, 1937, manufactures manufactured sugar shall keep an accurate record of the manufacturing done by him. A separate record shall be kept at and for each place where the manufacturing is done.

The

(2) Such records shall show: quantity of manufactured sugar and other sugar on hand at the beginning of the month; the quantity received during the month; the quantity of manufactured sugar produced during the month; the quantity sold during the month; the quantity of manufactured sugar used during the month in the production of other articles for sale; and the quantity of manufactured sugar and other sugar on hand at the end of the month. The records shall show the polariscopic test or total sugars of each grade and type of sugar and manufactured sugar.

(3) The records shall contain sufficient information to enable the Commissioner to determine the amount of tax due. Records shall likewise be kept of all transactions involved in any way in any claim or deduction based upon an exemption, or in connection with any claim for payment, refund, credit, or abatement. All records shall be open for inspection by internal revenue offcers and shall be maintained for a period of at least 4 years from the date the return is filed.

§ 312.505 Penalties. (1) A failure to file a return as required by the regulations in this part causes to accrue a penalty of 5 percent of the amount of the tax if such failure is for not more than 30 days, with an additional 5 percent for each additional 30 days or fraction thereof during which failure continues. In no case, however, shall the penalty exceed 25 percent in the aggregate.

(2) If assessment is made of the tax, penalty, or interest, and payment is not made within 10 days after the issuance of the form for first notice and demand, based on assessment approved by the Commissioner, there will accrue a 5 percent penalty, and interest at the rate of 6 percent a year computed upon the entire assessment (including penalty and interest, if any) from 10 days after issuance of said form until date of payment. In cases where assessment is settled by partial payments, interest is to be computed from the expiration of the first

10-day notice through the date of the first payment and from the next succeeding day to the date of the next payment, until the assessment is paid in full.

(3) If a claim for abatement is filed Iwith the collector within 10 days after the date of the issuance of the first notice and demand, the 5 percent penalty does not attach. If the assessment is not paid within 10 days after receipt of notice of rejection of the claim, the 5 percent penalty applies. The filing of the claim does not stay the running of interest, which continues to run for the full period that intervenes between the date of expiration of the first notice and demand and the date of payment.

(4) If a false or fraudulent return be willfully made, the penalty under section 3612 (d) (2), I. R. C., is 50 percent of the total tax due.

§ 312.506 Refunds. A tax (including any penalty or interest) erroneously, illegally, or otherwise wrongfully collected may be refunded by the Commissioner. A claim for such refund shall be made on Form 843 in accordance with the instructions printed on such form and in accordance with the regulations in this part. Copies of the prescribed forms may be obtained from the collector. The claim shall set forth clearly in detail the reasons and facts relied upon in support of the claim, shall be made under oath, and presented within four years next after payment of such taxes.

Part 314-Taxes on Gasoline, Lubricating Oil, and Matches

314.60

Subpart F-Administrative Provisions

Returns.

314.61 Payment of taxes. 314.62 Records.

314.63 Jeopardy assessment. 314.64 Credits and refunds. 314.65 Penalties and interest.

AUTHORITY: §§ 314.1 to 314.65 issued under 53 Stat. 419, 467; 26 U. S. C. 3450, 3791.

SOURCE: §§ 314.1 to 314.65 contained in Regulations 44, 9 F. R. 13453, 13557, except as noted following sections affected. Redesignation noted at 14 F. R. 5200.

SUBPART A-GENERAL PROVISIONS

§ 314.1 Meaning of terms. As used in the regulations in this part:

(a) The terms defined in the applicable provisions of law shall have the meanings so assigned to them.

(b) The term "manufacturer" includes producer and importer.

(c) The term "exporter" means the person named as shipper or consignor in the export bill of lading.

(d) The term "exportation" means the severance of an article from the mass of things belonging within the United States and the landing thereof in a foreign country for the purpose of uniting it with the mass of things belonging with

in such foreign country or within a possession of the United States.

(e) The term "possession of the United States" includes the Philippine Islands, the Panama Canal Zone, the Virgin Islands, Guam, Puerto Rico, American Samoa, Wake, and the Midway Islands.

(f) The term "sale" means an agreement whereby the seller transfers the property (that is, the title or the substantial incidents of ownership) in goods to the buyer for a consideration called the price, which may consist of money, services, or other things.

(g) The term "taxable article" means any article taxable under Chapter 29, subchapter A, of the Internal Revenue Code, as amended.

(h) The term "lease of an article" includes any renewal or extension of a lease or any subsequent lease of an article.

§ 314.2 Effective period. The taxes on the sale of gasoline, lubricating oils, and matches became effective under Title IV of the Revenue Act of 1932 on June 21, 1932. The applicable provisions of the Revenue Act of 1932 were superseded. effective March 1, 1939, by provisions of the Internal Revenue Code.

§ 314.3 Liability for tax. (a) Each manufacturer, producer, or importer is liable for tax on any sale, lease, or use of a taxable article, whether such sale, lease, or use is made directly or through an agent, except as otherwise provided. (See Subpart C of this part and §§ 314.5, 314.32, 314.33, 314.42, and 314.43.)

(b) The tax attaches upon sale or use by the manufacturer irrespective of when the article was manufactured, produced, or imported.

(c) In the case of a sale on credit, it is immaterial whether or not the purchase price is actually collected.

§ 314.4 When tax attaches. (a) In general, the tax attaches when the title to the article sold passes from the manufacturer to a purchaser.

(b) When title passes is dependent upon the intention of the parties as gathered from the contract of sale and the attendant circumstances. In the absence of expressed intention, the legal rules of presumption followed in the jurisdiction where the sale is made govern in determining when title passes. Generally, title passes upon delivery of the article

to the purchaser or to a carrier for the purchaser.

(c) Where a manufacturer consigns articles to a dealer, retaining ownership in them until they are disposed of by the dealer, title does not pass and the tax does not attach until sale by the dealer. Likewise, where the relationship between a manufacturer and a dealer is that of principal and agent, title passes upon sale by the dealer, and tax thereupon attaches.

§ 314.5 Sales of taxable articles by a person other than the manufacturer thereof. If the property (that is, the title or the substantial incidents of ownership) in an article is transferred from the manufacturer thereof, and, under the law, no tax attaches to such transfer, article by the transferee is subject to the tax. The following paragraphs illustrate the application of this rule:

(a) If a manufacturer, producer, or importer of any of the articles covered by the regulations in this part dies, the surviving spouse, child or children, executors or administrators, or other legal representatives, as the case may be, are liable for the tax on all such articles sold by them.

(b) A receiver or trustee in bankruptcy of a manufacturer, who conducts or liquidates a business under a court order, is liable for tax on all taxable articles sold by him, regardless of whether the articles were manufactured or imported before or after he took charge of the business.

(c) An assignee for the benefit of creditors of a manufacturer is liable for tax with respect to all taxable articles sold by him as such assignee.

(d) If one or more members of a partnership withdraw, and the business is continued by the remaining partners, or if new partners are admitted, the new partnership so constituted will be liable for tax on all taxable articles sold by it regardless of when they were manufactured or imported. Likewise, a corporation which results from a statutory consolidation is liable for tax on all taxable articles sold by it, and a stockholder who, after dissolution of a corporation, continues the business is similarly liable with respect to all articles which he sells.

§ 314.6 Tax on use by manufacturer, producer, or importer. (a) If a person manufactures, produces, or imports an article covered by the regulations in this