PUBLIC LAWS-CH. 439-JUNE 15, 1938 Provisos. Use as distilling material, tax. R.S . § 3309. 26 U. S. C.§ 1197. Withdrawal of sam- ples, tax provisions. Remission of forti- fication taxes on quan- tity of fortifying spir- its in exported wines, etc. 49 Stat. 1962. 26 U. S. C., Supp. III, § 1320a. Collection of certain distillates removed in distillation. Removal for dena- turation or destruc- tion, tax free. Distillates collected in fruit brandy distil- leries. Leakage, etc., allow- ance. Proviso. Limitation. 40 Stat. 1106; 49 Stat. 1946. 27 U. S. C., Supp. III, § 74b. subject to the taxes imposed by sections 611 or 613 as amended, may be removed from the winery where produced, free of tax, for storage on other bonded winery or bonded storeroom premises, or from such premises to other such bonded premises, or for exportation from the United States or for use as distilling material at any regularly regis- tered distillery or industrial alcohol plant: Provided, however, That the distiller using any such wine as distilling material shall, subject to the provisions of section 3309 of the Revised Statutes, as amended, be held to pay the tax on the product of such wines as will include both the alcoholic strength therein produced by fermentation and that obtained from the brandy or wine spirits added to such wines at the time of fortification: Provided further, That suitable samples of brandy or fruit spirits may be withdrawn under rules and regulations to be prescribed by the Commissioner of Internal Revenue, subject to the approval of the Secretary of the Treasury, which samples shall be tax-free if for laboratory analysis and tax-paid if for any other use: Provided further, That the Commissioner of Internal Revenue, under rules and regulations to be by him prescribed subject to the approval of the Secretary of the Treasury, shall remit or refund all fortification taxes assessed or paid upon the quantity of fortifying spirits contained in wines exported, or which have become unfit for use as wine and are used as distilling material." SEC. 2 . Section 410 of the Liquor Tax Administration Act (U. S . C ., 1934 edition, Supp. III, title 26, sec. 1320a) is amended to read as follows: "SEC. 410. Under rules and regulations to be prescribed by the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury, distillers may collect, in locked tanks, distillates con- taining one-half of 1 per centum or more of aldehydes or 1 per centum. or more of fusel oil (heads and tails) removed in the course of dis- tillation. The distillates so collected may, under regulations pre- scribed by the Commissioner, with the approval of the Secretary, be removed from such distillery for denaturation or be destroyed in the manner prescribed by the Commissioner, under the supervision of an internal-revenue officer to be designated by the Commissioner, and when so denatured or destroyed shall not be subject to the tax im- posed by law upon distilled spirits. Such distillates so collected in fruit brandy distilleries may, under regulations to be prescribed by the Commissioner, with the approval of the Secretary, be drawn into approved casks, barrels, or other containers and stored in the brandy deposit room of the fruit brandy distillery where produced pending removal for denaturation or destruction." SEC. 3. The Commissioner of Internal Revenue, under rules and regulations to be by him prescribed with the approval of the Secre- tary of the Treasury, upon the presentation of proof to his satisfac- tion of the loss by leakage, evaporation, theft, or otherwise of brandy or fruit spirits, intended for the fortification of wine, from storage tanks in bonded warehouses or from steel drums filled therefrom while such drums are in such warehouse, and in the fortification room of a bonded winery, not occurring as the result of any negli- gence, connivance, collusion, or fraud on the part of the winemaker or his agents, is hereby authorized to remit or refund the taxes assessed or paid upon such lost brandy or fruit spirits: Provided, however, That such remission or refund shall be allowed only to the extent that the distiller or winemaker is not indemnified or recom- pensed for such loss. SEC. 4 . The first paragraph of section 602 of the Revenue Act of 1918, as amended (U. S . C., 1934 edition, Supp. III, title 27, sec. 74b), is amended by inserting in lieu of the period at the end thereof 700 [52 STAT.
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