ises, not to exceed such maximum periods as he may by regulations prescribe. (b) COLLECTION OF TAX ON IMPORTED DISTILLED SPIRITS AND PERFUMES CONTAINING DISTILLED SPIRITS. (1) DISTILLED SPIRITS.-The internal revenue tax imposed by section 5001 (a) (1) and (2) upon imported distilled spirits shall be collected by the Secretary or his delegate and deposited as internal revenue collections, under such regulations as the Secretary or his delegate may prescribe. Such tax shall be in addition to any customs duty imposed under the Tariff Act of 1930 (46 Stat. 590; 19 U. S. C., chapter 4), or any subsequent act. Section 5688 shall be applicable to the disposition of imported spirits. (2) PERFUMES CONTAINING DISTILLED SPIRITS.-The internal revenue tax imposed by section 5001 (a) (3) upon imported perfumes containing distilled spirits shall be collected by the Secretary or his delegate and deposited as internal revenue collections, under such regulations as the Secretary or his delegate may prescribe. (c) CROSS REFERENCES. (1) For authority of the Secretary or his delegate to make determinations and assessments of internal revenue taxes and penalties, see section 6201 (a). (2) For authority to assess tax on distilled spirits not bonded, see section 5006 (c). (3) For provisions relating to payment of tax, under certain conditions, on distilled spirits withdrawn free of tax, denatured distilled spirits, articles, and volatile fruit-flavor concentrates, see section 5001 (a) (5), (6), and (7). SEC. 5008. ABATEMENT, REMISSION, REFUND, AND ALLOWANCE FOR LOSS OR DESTRUCTION OF DISTILLED SPIRITS. (a) DISTILLED SPIRITS LOST OR DESTROYED IN BOND. (1) EXTENT OF LOSS ALLOWANCE.-No tax shall be collected in respect of distilled spirits lost or destroyed while in bond, except that such tax shall be collected (A) THEFT.-In the case of loss by theft, unless the Secretary or his delegate finds that the theft occurred without connivance, collusion, fraud, or negligence on the part of the proprietor of the distilled spirits plant, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them; and (B) VOLUNTARY DESTRUCTION.-In the case of voluntary destruction, unless such destruction is carried out as provided in subsection (b) (1). (2) PROOF OF LOSS.-In any case in which distilled spirits are lost or destroyed, whether by theft or otherwise, the Secretary or his delegate may require the proprietor of the distilled spirits plant or other person liable for the tax to file a claim for relief from the tax and submit proof as to the cause of such loss. In every case where it appears that the loss was by theft, the burden shall be upon the proprietor of the distilled spirits plant or other person responsible for the distilled spirits tax to establish to the satisfaction of the Secretary or his delegate that such loss did not occur as the result of connivance, collusion, fraud, or negligence on the part of the proprietor of the distilled spirits plant, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them. (3) REFUND OF TAX.-In any case where the tax would not be collectible by virtue of paragraph (1), but such tax has been paid, the Secretary or his delegate shall refund such tax. (4) LIMITATIONS.-Except as provided in paragraph (5), no tax shall be abated, remitted, credited, or refunded under this subsection where the loss occurred after the tax was determined (as provided in section 5006 (a)). The abatement, remission, credit, or refund of taxes provided for by paragraphs (1) and (3) in the case of loss of distilled spirits by theft shall only be allowed to the extent that the claimant is not indemnified against or recompensed in respect of the tax for such loss. (5) APPLICABILITY.-The provisions of this subsection shall extend to and apply in respect of distilled spirits lost after the tax was determined and prior to the completion of the physical removal of the distilled spirits from bonded premises, but shall not be applicable where the loss occurred after the time prescribed for the withdrawal of the distilled spirits from bonded premises under section 5006 (a) (2) unless the loss occurred in the course of physical removal of the spirits immediately subsequent to such time. This paragraph shall not be applicable to any loss of distilled spirits for which abatement, remission, credit, or refund of tax is allowable under the provisions of subsection (c), or would be allowable except for the limitations established under subsection (c) (3). (b) VOLUNTARY DESTRUCTION. (1) DISTILLED SPIRITS IN BOND.--The proprietor of the distilled spirits plant or other person liable for the tax imposed by this chapter with respect to any distilled spirits in bond may voluntarily destroy such spirits, but only if such destruction is under such supervision, and under such regulations, as the Secretary or his delegate may prescribe. (2) DISTILLED SPIRITS WITHDRAWN FOR RECTIFICATION OR BOTTLING.-Whenever any distilled spirits withdrawn from bond on or after July 1, 1959, on payment or determination of tax for rectification or bottling are (before the completion of the bottling and casing or other packaging of such spirits for removal from the bottling premises of the distilled spirits plant to which removed from bond) found by the proprietor who withdrew such spirits to be unsuitable for the purpose for which intended to be used, such spirits may, on application to the Secretary or his delegate, be destroyed after such gauge and under such supervision as the Secretary or his delegate may by regulations prescribe. If a claim is filed within 6 months from the date of such destruction, the Secretary or his delegate shall, under such regulations as he may prescribe, abate, remit, or, without interest, credit or refund the tax imposed under section 5001 (a) (1) on the spirits so destroyed, to the proprietor of the distilled spirits plant who withdrew the distilled spirits on payment or determination of tax. (c) Loss oF DISTILLED SPIRITS WITHDRAWN FROM BOND FOR RECTIFICATION OR BOTTLING. (1) GENERAL.-Whenever any distilled spirits withdrawn from bond on payment or determination of tax for rectification or bottling are lost before the completion of the bottling and casing or other packaging of such spirits for removal from the bottling premises of the distilled spirits plant to which removed from bond, the Secretary or his delegate shall, under such regulations as he may prescribe, abate, remit, or, without interest, credit or refund the tax imposed on such spirits under section 5001 (a) (1) to the proprietor of the distilled spirits plant who withdrew the distilled spirits on payment or determination of tax for removal to his bottling premises, if it is established to the satisfaction of the Secretary or his delegate that (A) such loss occurred (i) by reason of accident while being removed from bond to bottling premises, or (ii) by reason of flood, fire, or other disaster; or (B) such loss occurred by reason of, and was incident to, authorized rectifying, packaging, bottling, or casing operations (including losses by leakage or evaporation occurring during removal from bond to the bottling premises and during storage on bottling premises pending rectification or bottling). (2) LIMITATION.-No abatement, remission, credit, or refund of taxes shall be made under this subsection (A) in any case where the claimant is indemnified or recompensed for the tax; (B) in excess of the amount allowable under paragraph (3), in case of losses referred to in paragraph (1) (B); or (C) unless a claim is filed, under such regulations as the Secretary or his delegate may prescribe, by the proprietor of the distilled spirits plant who withdrew the distilled spirits on payment or determination of tax, (i) within 6 months from the date of the loss in case of losses referred to in paragraph (1) (A), or (ii) within 6 months from the close of the fiscal year in which the loss occurred in case of losses referred to in paragraph (1) (B). The quantity of distilled spirits lost within the meaning of subparagraph (B) of paragraph (1) shall be determined at such times and by such means or methods as the Secretary or his delegate shall by regulations prescribe. (3) MAXIMUM LOSS ALLOWANCES. (A) If all the alcoholic ingredients used in distilled spirits products during the fiscal year were distilled spirits withdrawn from bond by the proprietor of the bottling premises on payment or determination of tax, for removal to such premises, the loss allowable in such fiscal year under paragraph (1) (B) shall not be greater than the excess of losses over gains, and shall not exceed the maximum amount of loss allowable as shown in the following schedule: If total completions during the fiscal year in proof gallons are: Not over 24,000-- Over 24,000 but not over 120,000__ Over 120,000 but not over 600,000____ Over 600,000 but not over 2,400,000... The maximum allowable loss in 2 percent of completions. 1,440 proof gallons plus .6% of 4,320 proof gallons plus .3% of excess over 600,000. 9,720 proof gallons plus .2% of excess over 2,400,000. The Secretary or his delegate may, by regulations, reduce the amount of the maximum allowable losses in the preceding schedule when he finds that such adjustment is necessary for protection of the revenue, or increase the amount of such maximum allowable losses if he finds that such may be done without undue jeopardy to the revenue and is necessary to more nearly provide for the actual losses described in paragraph (1) (B). However, in no event shall allowable losses exceed 2 percent of total completions. (B) If alcoholic ingredients other than distilled spirits withdrawn from bond by the proprietor of the bottling premises on payment or determination of tax, for removal to such premises, were used in distilled spirits products during the fiscal year, the loss allowable under paragraph (1) (B) shall be determined by first obtaining the amount that would have been allowable if all of the ingredients had been distilled spirits withdrawn from bond by the proprietor of the bottling premises on payment or determination of tax, for removal to such premises, and thereafter reducing this amount by an amount proportional to the percentage which the total proof gallons of such alcoholic ingredients bears to the total proof gallons of all alcoholic ingredients used in such distilled spirits products. (C) As used in this subsection, the term "completions" means the distilled spirits products bottled and cased or otherwise packaged or placed in approved containers for removal from the bottling premises, and the term "fiscal year" means the period from July 1 of a calendar year through June 30 of the following year. (D) The Secretary or his delegate may, under such regulations and conditions as he may prescribe, make tentative allowances for losses provided for in paragraph (1) (B), for fractional parts of a year, which allowances shall be computed by the procedures prescribed in paragraphs (3) (A) and (3) (B), except that the numerical values for the completions and for the maximum allowable losses in proof gallons in the schedule in paragraph (3) (A) shall be divided by the number of such fractional parts within the fiscal year. (E) The loss allowable to any proprietor qualifying for abatement, remission, credit, or refund of taxes under paragraph (1) (B) shall not exceed the quantity which would be allowed by a tentative estimates schedule constructed in accordance with paragraph (3) (D) for the portion of the fiscal year that such proprietor was qualified to operate the distilled spirits plant. (F) Notwithstanding the limitations contained in the schedule in paragraph (3) (A) the Secretary or his delegate may, under such regulations as he may prescribe, in addition to the losses allowable under paragraph (1) (A) and (1) (B), allow actual determined losses incurred in the manufacture of gin and vodka where produced in closed systems in a manner similar to that authorized on bonded premises. (4) ELIGIBLE PROPRIETORS. (A) The term "proprietor" as used in this subsection and in subsection (b) (2) shall, in the case of a corporation, include all affiliated or subsidiary corporations who are qualified during the fiscal year for successive operation of the same bottling premises and who make joint application to the Secretary or his delegate to be treated as one proprietor for the purposes of this subsection and subsection (b) (2) and who comply with such conditions as the Secretary or his delegate may by regulations prescribe. (B) For the purposes of this subsection and subsection (b) (2) a proprietor of bottling premises of a distilled spirits plant who makes application to the Secretary or his delegate for the withdrawal of distilled spirits from bond on payment of tax for removal to such bottling premises shall be deemed to be the proprietor who withdrew distilled spirits on payment of tax, and the distilled spirits withdrawn pursuant to such application shall be deemed to have been withdrawn by such proprietor on payment of tax, whether or not he was the person who paid the tax. (5) APPLICABILITY.-This subsection shall apply in respect of losses of distilled spirits withdrawn from bond on or after July 1, 1959. This subsection shall also apply in respect of losses, occurring on or after July 1, 1959, and after dumping for rectification or bottling, of distilled spirits withdrawn from bond prior to July 1, 1959, and such spirits shall be considered as having been withdrawn from bond on payment or determination of tax by the proprietor of the bottling premises at which the spirits are dumped for rectification or bottling. (d) DISTILLED SPIRITS RETURNED TO BONDED PREMISES. (1) ALLOWANCE OF TAX.-Whenever any distilled spirits withdrawn from bonded premises, on or after July 1, 1959, on payment or determination of tax are returned under section 5215 to the bonded premises of a distilled spirits plant, the Secretary or his delegate shall abate, remit, or (without interest) credit or refund the tax imposed under section 5001 (a) (1) on the spirits so returned. (2) LIMITATION.-No allowance under paragraph (1) shall be made unless a claim is filed, under such regulations as the Secretary or his delegate may prescribe, by the proprietor of the distilled spirits plant to which the distilled spirits are returned, within 6 months of the date of return; and no claim shall be allowed in respect of any distilled spirits withdrawn from the bonded premises of a distilled spirits plant more than 6 months prior to the date of such return. (e) SAMPLES FOR USE BY THE UNITED STATES.-The Secretary or his delegate shall, under such regulations as he may prescribe, without interest, credit or refund to the proprietor the tax on any samples of distilled spirits removed from the premises of a distilled spirits plant for analysis or testing by the United States. (f) DISTILLED SPIRITS WITHDRAWN WITHOUT PAYMENT OF TAX.The provisions of subsection (a) shall be applicable to loss of distilled spirits occurring during transportation from bonded premises of a distilled spirits plant to (1) the port of export, in case of withdrawal under section 5214 (a) (4); (2) the customs manufacturing bonded warehouse, in case of withdrawal under section 5214 (a) (6); |