house inspector certifying that the casks or packages have been shipped under his supervision on board said vessel, and the tax-paid stamps obliterated; and the said inspector shall make a similar certificate to the surveyor of the port, indorsed on or to be attached to the entry in possession of the customhouse.

A drawback shall be allowed upon distilled spirits on which the tax has been paid and exported to foreign countries, under the provisions of this section, when exported as herein provided for. The drawback allowed shall include the taxes levied and paid upon the distilled spirits exported, and the rate of drawback shall be equal to the rate of the internal tax paid in respect of the distilled spirits exported, as per last gauge of said spirits prior to exportation, and shall be due and payable only after the proper entries have been made and filed and all other conditions complied with as hereinbefore required, and on filing with the Secretary the proper claim, accompanied by the certificate of the collector of customs at the port of entry where the spirits are entered for export that such spirits have been received into his custody and the tax-paid stamps thereon obliterated; and the Secretary shall prescribe such rules and regulations in relation thereto as may be necessary to secure the Treasury of the United States against frauds.

[For drawback upon exportation of bottled spirits, see section 3179 (b). For abolishment of offices of surveyor of customs (except at the port of New York), see act of July 5, 1932 (47 Stat. 584; 19 U. S. C. 5a).] SEC. 2888. TRANSFER OF SPIRITS INTO TANK CARS FOR EXPORT.

(a) REQUIREMENT.-Under such regulations as the Commissioner, with the approval of the Secretary, may prescribe, alcohol or other distilled spirits of a proof strength of not less than 180 degrees intended for export free of tax may be drawn from receiving cisterns at any distillery, or from storage tanks in any internal revenue bonded warehouse, for transfer to tanks or tank cars for export from the United States, and all provisions of law relating to the exportation of distilled spirits not inconsistent herewith shall apply to spirits removed for export under the provisions of this section.

(b) TRANSFER OF DUTIES.

For transfer of powers and duties of Commissioner and his agents, see section 3170.

SEC. 2889. ALLOWANCE FOR ACCIDENTAL LOSS OR LEAKAGE DURING TRANSPORTATION FROM WAREHOUSE TO PORT OF EXPORT.

(a) POWER OF COMMISSIONER.-Where spirits are withdrawn from internal revenue bonded warehouses for exportation according to law, it shall be lawful, under such rules and regulations and limitations as shall be prescribed by the Commissioner, with the approval of the Secretary, for an allowance to be made for leakage or loss by an unavoidable accident, and without any fraud or negligence of the distiller, owner, exporter, carrier, or their agents or employees, occurring during transportation from an internal revenue bonded warehouse to the port of export, nor shall any assessment be collected for such loss or leakage.

(b) TRANSFER OF DUTIES.

For transfer of powers and duties of Commissioner and his agents, see section 3170.

SEC. 2890. REMISSION OF TAX ON SPIRITS ACCIDENTALLY LOST.

Where the spirits provided for in the preceding section are covered by a valid claim of insurance in excess of the market value thereof, exclusive of the tax, the tax upon such spirits shall not be remitted to the extent of such excessive insurance.

SEC. 2891. WITHDRAWAL OF DISTILLED SPIRITS TO MANUFACTURING BONDED WAREHOUSE.

(a) AUTHORIZATION.-Under such regulations and requirements as to stamps, bonds, and other security as shall be prescribed by the Commissioner, any manufacturer of medicines, preparations, compositions, perfumeries, cosmetics, cordials, and other liquors, for export, manufacturing the same in a duly constituted manufacturing warehouse, shall be authorized to withdraw, in original packages, from any internal revenue bonded warehouse, so much distilled spirits as he may require for the said purpose, without the payment of the internal revenue tax thereon.

(b) ALLOWANCE FOR LOSS OR LEAKAGE. Where spirits are withdrawn from internal revenue bonded warehouses for transfer to manufacturing warehouses, under the provisions of this chapter, it shall be lawful, under such rules and regulations and limitations as shall be prescribed by the Commissioner, with the approval of the Secretary, for an allowance to be made for leakage or loss by any unavoidable accident, and without any fraud or negligence of the distiller, owner, exporter, carrier, or their agents or employees, occurring during transportation from an internal revenue bonded warehouse to a manufacturing warehouse.

(c) TRANSFER OF DUTIES.

For transfer of powers and duties of Commissioner and his agents, see section 3170.

Part IV-Miscellaneous Provisions Relating to Distilled Spirits SEC. 2900. DATE OF WITHDRAWAL.

(a) GENERAL RULE.-All distilled spirits entered * * * for deposit in an internal revenue bonded warehouse shall be withdrawn therefrom within eight years from the date of original entry therein, except as provided in subsection (b) of this section.

(b) EXCEPTION.-Distilled spirits which on July 26, 1936, are eight years of age, or older, and which are in bonded warehouses, may remain therein after such date; but no allowance for loss by leakage or evaporation shall be made in the case of such spirits with respect to any period after such date: Provided, That loss allowances for such spirits for the period prior to July 26, 1936, shall be made pursuant to the provisions of the act of February 6, 1925, c. 143, 43 Stat. 808. SEC. 2901. LOSS ALLOWANCES.

(a) LEAKAGE OR EVAPORATION. (1) Any distilled spirits on deposit in any internal revenue bonded warehouse may,

* * *

at the time of withdrawal of the spirits from such warehouse, upon the filing of an application for the regauge of such spirits, giving a description of the package containing the spirits, be regauged by a storekeeper-gauger who shall place upon such package such marks and brands as the Commissioner, with the approval of the Secretary, shall by regulations prescribe. If upon such regauging it shall appear there has been a loss by leakage or evaporation of distilled spirits from any cask or package, without the fault or negligence of the distiller or warehouseman, taxes shall be collected only on the quantity of distilled spirits contained in such cask or package at the time of such withdrawal. The allowance which shall be made for such loss of spirits shall not exceed

11⁄2 proof gallons for 2 months or part thereof;

21⁄2 gallons for more than 2 months and not more than 4 months; 3 gallons for more than 4 months and not more than 6 months; 31⁄2 gallons for more than 6 months and not more than 8 months; 4 gallons for more than 8 months and not more than 10 months; 41⁄2 gallons for more than 10 months and not more than 12 months;

5 gallons for more than 12 months and not more than 14 months;

51⁄2 gallons for more than 14 months and not more than 16 months;

6 gallons for more than 16 months and not more than 18 months;

61⁄2 gallons for more than 18 months and not more than 21 months;

7 gallons for more than 21 months and not more than 24 months;

71⁄2 gallons for more than 24 months and not more than 27 months;

8 gallons for more than 27 months and not more than 30 months;

81⁄2 gallons for more than 30 months and not more than 33 months;

9 gallons for more than 33 months and not more than 36 months;

91⁄2 gallons for more than 36 months and not more than 39 months;

10 gallons for more than 39 months and not more than 42 months;

10%1⁄2 gallons for more than 42 months and not more than 45 months;

11 gallons for more than 45 months and not more than 48 months;

111⁄2 gallons for more than 48 months and not more than 51 months;

12 gallons for more than 51 months and not more than 54 months;

121⁄2 gallons for more than 54 months and not more than 57 months;

13 gallons for more than 57 months and not more than 60 months;

131⁄2 gallons for more than 60 months and not more than 63 months;

14 gallons for more than 63 months and not more than 66 months;

141⁄2 gallons for more than 66 months and not more than 69 months;

15 gallons for more than 69 months and not more than 72 months;

151⁄2 gallons for more than 72 months and not more than 75 months;

16 gallons for more than 75 months and not more than 78 months;

161⁄2 gallons for more than 78 months and not more than 81 months;

17 gallons for more than 81 months and not more than 84 months;

171⁄2 gallons for more than 84 months and not more than 90 months;

18 gallons for more than 90 months from the date of original gauge as to fruit brandy, or original entry as to all other spirits; and no further allowance shall be made for loss by leakage or evaporation.

The foregoing allowance shall not apply to distilled spirits which on July 26, 1936, were eight years of age, or older, and which on that date were in bonded warehouses.

The foregoing allowance for loss shall apply only to casks or packages of a capacity of 40 or more wine gallons, and the allowance for loss on casks or packages of less capacity than 40 gallons shall not exceed one-half the amount allowed on said 40-gallon casks or packages; but no allowance shall be made. on casks or packages of less capacity than 20 gallons. The proof of such distilled spirits shall not in any case be computed at the time of withdrawal at less than 100 per centum.

[The act of August 4, 1939 (53 Stat. 1202, c. 427) reads as follows: "That the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, is authorized to make allowances for losses by leakage and evaporation in accordance with section 2901, Internal Revenue Code, upon withdrawal of packages of brandy or fruit spirits now deposited in internal-revenue bonded warehouses, which were filled from storage tanks in bonded warehouses prior to June 26, 1936."]

1

(b) Loss. The Commissioner may, under regulations to be prescribed by him and approved by the Secretary,2 abate any internal revenue taxes accruing on distilled spirits if he shall find that

(1) The distilled spirits were not stolen or intentionally destroyed but were lost, otherwise than by leakage or evaporation, while on the premises of a registered distillery, during or after production and prior to deposit in an internal revenue bonded warehouse.

1 The words "of Internal Revenue" are omitted. 2 The words "of the Treasury" are omitted.

(2) The distilled spirits were not stolen or intentionally destroyed but were lost, otherwise than by leakage or evaporation, while being transferred between buildings constituting the same internal revenue bonded warehouse or while being transferred by a common carrier from the premises of a registered distillery to an internal revenue bonded warehouse off such registered distillery premises, or while being transferred by a common carrier between internal revenue bonded warehouses.

(3) The distilled spirits were not stolen or intentionally destroyed but were lost, otherwise than by leakage or evaporation, while the same remained in an internal revenue bonded warehouse and such loss is not allowable under subsection (a) hereof.

(4) The distilled spirits were withdrawn for use in the fortification of sweet wines and were not stolen or intentionally destroyed but were lost, otherwise than by leakage or evaporation, prior to such use while being transferred to, or while stored in, the fortifying room on the bonded winery premises.

(5) The distilled spirits were lost by theft from the premises of a registered distillery, or while being transferred between buildings constituting the same internal revenue bonded warehouse, or while being transferred by common carrier to an internal revenue bonded warehouse off such registered distillery premises, or while being transferred by a common carrier between internal revenue bonded warehouses, and that such loss did not occur as the result of connivance, collusion, fraud, or negligence on the part of the distiller, owner, consignor, consignee, bailee, or carrier, or the employees of any of them.

(6) The distilled spirits were lost by theft from an internal revenue bonded warehouse, and that such loss did not occur as the result of connivance, collusion, fraud, or negligence on the part of the distiller, owner, or warehouseman, or the employees of any of them.

(7) The distilled spirits were withdrawn for use in the fortification of sweet wines and were lost by theft prior to such use while being transferred to, or while stored in, the fortifying room on the bonded winery premises, and that such loss did not occur as the result of connivance, collusion, fraud, or negligence on the part of the distiller, owner, consignor, consignee, bailee, or carrier, or the employees of any of them.

(8) The distilled spirits were unfit for use for beverage purposes and were voluntarily destroyed by the distiller, the warehouseman, or the proprietor of the bonded winery premises, pursuant to the written permission of the Commissioner in each case and under regulations which the Commissioner, with the approval of the Secretary, is hereby authorized to promulgate. (c) REFUND OF TAX.-When, in any case to which subsection (a) or (b) applies, the tax is paid subsequent to the loss or destruction, as the case may be, of the spirits, the Commissioner may, under regulations prescribed by him with the approval of the Secretary, refund such tax.