to tax as a wholesale dealer. Brewers are allowed to sell malt liquors of their own production at the place of manufacture in original casks, but not elsewhere, without payment of the tax.1

Section 3340-Brewer Evading Tax-False Entry, &c.-If the owner, agent, or superintendent of a brewery (a) evades the tax on malt liquors, or attempts to evade it; (b) fraudulently neglects or refuses to make true and exact entries of materials purchased and liquors produced, and report of the same as required, or omits anything required to be done by him; (c) or intentionally makes any false entry or statement in his books, or allows the same to be done-he is punished by fine and imprisonment, and in addition there is incurred a forfeiture for every such offense of all the liquors made by him or for him, and all the vessels, utensils, and apparatus used in making the liquor. An accidental omission or unintentional error in the entries in the books or report is not within the statute; it must be accompanied by the fraudulent intent to subject the person to punishment or to incur the forfeiture. A neglect to keep books, a refusal to furnish the account and duplicate required by statute, or a refusal to allow the revenue officers to examine the books, subjects the party to a fine of $300 for each offense."

Section 3352-Possession of Malt Liquor on which Tax has not been paid. After malt liquors have been sold or removed from the brewery, warehouse, or place of manufacture, if the tax has not been paid, it is liable to seizure and forfeiture. The absence of the stamp on such liquor is notice to all persons that the tax has not been paid, and is made by the statute prima facie evidence of non-pay

ment.

Section 3354-Bottling Fermented Liquor.-Persons engaged in this business, if they withdraw the liquor from a keg or vessel upon which the proper stamp has not been affixed, or if they carry on the business in any brewery, or upon any premises having communication with such brewery, or any warehouse for the storage of malt liquors, are liable to a fine of $500, and they forfeit all the property used in the business of bottling.

Section 3367.-Persons who purchase or receive for sale tobacco or snuff from a manufacturer who has not paid the special tax, are liable to a penalty of $100 for each offense, and they incur a forfeiture of all articles so purchased or received for sale. Where tobacco is manufactured on shares, or by one person for another, if there is

1 Underhill v. Pleasanton, 8 Blatch. C. C. 260.

3 United States v. Obermeyer, 5 Ben. 541.

R. S. U. S. § 3340. 4 R. S. U. S. § 3340.

any fraud on the part of either of them, or any collusion on their part to defraud the revenue, the materials and the articles manufactured are subject to forfeiture, and the persons are punished by fine and imprisonment. All tobacco or snuff on which the tax has not been paid. is subject to forfeiture, and, as in the case of malt liquors, the absence of the stamp is notice to all persons of non-payment of the tax, and is made by statute prima facie evidence of such non-payment.?

Section 3372-Removal or Sale without Payment of Tax, &c.The distinctive feature of the system now in operation as to distilled spirits, malt liquors, tobacco, snuff, and cigars, is that the tax is to be paid by means of a stamp affixed to the packages before they are removed from the place of manufacture. In the case of distilled spirits, the officers of the government have custody of the package, and it is allowed to be sold before the tax is paid by the manufacturer, the tax being then paid by the purchaser. But as to the other articles which are not thus in the custody of the officers, the tax is to be paid not only before removal, but before any sale is made of the product manufactured.

The manufacturer of tobacco or snuff who, (a) removes or sells the article manufactured without paying the tax and affixing the stamp as provided by statute; (b) or without paying his special tax, or giving the bond required of him; (c) or who makes fraudulent entries of his manufactures or sales; (d) or who makes fraudulent entries of the purchase or sales of leaf tobacco or other material; (e) or who affixes to any package a false or counterfeit stamp, or stamp which has been used, in addition to other penalties, forfeits all his raw material, all manufactured or partly manufactured tobacco and snuff, all machinery, tools, implements, apparatus, fixtures, boxes, barrels, and all other materials which may be found in his possession in his manufactory or elsewhere. He is also subject to fine and imprisonment for removing or selling without proper stamp affixed and canceled, and if intended for export, without proper export stamp.3

Section 3372, as to removal, includes something more than removal without paying the tax. The expression is a "removal otherwise than as provided by law." This includes all the requirements on the subject. It must be in legal packages, the label must be attached, if in a wooden package there must be printed or marked on it the manufacturer's name, the registered number of the factory, gross weight, net weight, and tare of the box, and the stamps must be

1 R. S. U. S. § 3370.

R. S. U. S. § 3374.

2

R. S. U. S. § 3373.

affixed and canceled as required by law, indicating the weight and class of tobacco for which payment of the tax is made. A removal without complying with any one of the requirements of the statute subjects the property designated to forfeiture, while as to the sale the forfeiture is only incurred when it is made without affixing stamps, paying special tax, or giving bond.

Prior to 1868, the tax was not paid by stamps, but it became due when there was a removal for consumption or sale, and the manufacturer was required then as now to keep a record or account of his sales. L., a tobacco manufacturer, sold to K. a quantity of tobacco; a check was given in payment, which in a few days was returned to the owner. L. returned the tobacco as sold that day, and claimed to pay the rate of tax in force on that day. Such a transaction does not constitute a sale or a removal in the sense of the statute. There must be a removal in good faith for consumption, with a present intention to have it consumed, and the title to the property must be changed, or it must be sent for sale on commission, or in some way an intent must be shown to bring the case within the statute. In these cases, although the party actually paid the tax at the time of the pretended sale, when subsequently actually sold, he was compelled to pay the tax as of that date and at the rate of the tax then in force. The first transaction was regarded as illegal and contrary to the policy of the law, which was to prevent the accumulation of tax-paid tobacco in the hands of a manufacturer, by compelling the payment of the tax when the tobacco is manufactured and sold, or removed.

When the manufacture of the goods is completed, and they are ready for sale, an account is to be kept of such manufactured goods to enable the manufacturer to make his annual inventory. He is also required to keep an account of his sales. When a manufacturer removes goods in mass from the place where manufactured to the retail department, and makes an entry of such goods as sold at that time, but makes no entry at the time of the sale of the goods at the counter of the retail department, this is not such an account of the sales of tobacco as the statute requires.2

Peddler of Tobacco.-If he refuses to exhibit his stamp showing that he has paid the special tax of a peddler, he subjects to forfeiture his horses or mules, wagon and contents, pack, bundle or basket.3 This forfeiture, with its accompanying right of seizure by the revenue officers, is only to be exercised in cases of contumacy in refusing to

1 United States v. Quantity of Tobacco, 5 Ben. 112; United States v. Quantity of Tobacco, 6 Ben. 68.

95 Ben. 112.

R. S. U. S. § 3383.

produce the stamp evidencing the payment of the tax. It cannot be exercised for any deficiency in the amount of tax paid, or any defect in the mode of issuing the tax-paid stamp by the collector. The officers authorized to seize are not vested with judicial powers; they act upon a patent fact within their cognizance.1

Removal and Sale of Cigars.-Cigars removed from the factory in illegal boxes, without proper stamp, or with stamp not canceled, or without burning into the box with a branding iron the number of cigars, name of manufacturer, and number and district of the State, or if they are not packed as required, are forfeited. If a manufacturer of cigars removes or sells any cigars without payment of the special tax, or giving the bond required, or without affixing the stamps denoting the tax, or if he makes fraudulent entries of the manufacture or sale of cigars, or of the purchase and sale of leaf tobacco or other material, or affixes a fraudulent or counterfeit stamp, he subjects to forfeiture the raw material, the manufactured or partly manufactured tobacco and cigars, all machinery, tools, implements, apparatus, fixtures, boxes, barrels, and all other materials found in his possession or in his manufactory, and used in his business as such manufacturer, also all his estate or interest in the building or factory, and the tract or lot of ground on which such building or factory is located, and all appurtenances thereunto belonging. It will be noticed that under the first of these sections cited only the article manufactured, the box of cigars, is forfeited, while under the latter the whole establishment of the manufacturer and all it contains is forfeited. The removal without proper stamp is included under both of these sections.

A cigar manufacturer manufactured his cigars in the back part of a room, and sold them in the front part of the same room. Cigars removed from the rear of the room to the front, without stamping and branding, incurred the forfeiture under the statute. Such a removal was a removal from the place of manufacture to the place of sale.

Section 3405.-Every person who purchases or receives for sale cigars from a manufacturer who has not paid the special tax is liable to a fine of $100 for each offense, and forfeits the articles purchased, or the full value thereof.

Forfeiture of Articles under Schedule A.-If a manufacturer of any medicines in which a proprietary right is claimed, cosmetics or

I Crosby v. Brown, 60 Barb. (N. Y.) 548. 3 R. S. U. S. § 3400.

R. S. U. S. § 3397. United States v. Neid, 8 Phila. (Penn.) 169.

perfumes, friction matches, or playing cards, after they are properly stamped, removes or permits the stamp to be removed, or uses a stamp or the cover to which it is affixed for any other commodity than that originally contained in the cover or wrapper, he is liable to a fine of $50, and the articles are forfeited.' If a manufacturer of such articles, to evade the tax due thereon, sells, removes, or delivers any article before the tax is paid by affixing the stamp provided by law, or with like intent hides, conceals, removes or deposits any such article in any place, or causes it to be done, he is subject to a fine of $100, and in addition forfeits the article. Even if the goods are intended for export, and are sent to the wharf of a steamer for transportation to a foreign port, they are subject to tax, and must have the stamp affixed. They are liable to forfeiture, even though intended for exportation, unless they are manufactured in the bonded warehouse, and removed in the mode prescribed in § 3433. The act applies to such articles manufactured in the United States, without reference to the place of sale, whether in the United States or a foreign country.3

§ 176. Forfeitures under General Provisions.-The provisions of the law just considered are in reference to the manufacture of special articles, and they vary according to the article. Those which it is proposed now to consider, apply equally to all articles manufactured, which are subject to the internal revenue tax.

Section 3450.-Removal with Intent to Defraud.—Whenever goods of any kind on which a tax is imposed, or the materials, utensils or vessels proper or intended to be made use of in the making of such goods, are removed, deposited or concealed in any place with intent to defraud the United States of such tax, or any part thereof, it subjects to forfeiture the goods or other articles so removed, the packages in which the goods are contained, and every boat, vessel, cart, carriage or other conveyance, together with all horses or other animals, or any other thing that is used in the removal, deposit, or concealment of such articles. It was under this section that the forfeiture was claimed in the Henderson distilled spirits, which has been discussed. It was claimed by the minority of the court in that case, that this section did not apply to distilled spirits, but was only intended to apply to the removal of articles for which no distinct penalty was otherwise provided. But the majority thought otherwise, and the opinion is, I believe, generally acquiesced in that this and other sec

1 R. S. U. S. § 3431.

R. S. U. S. § 3482.

3 United States v. One Dozen Boxes of Cosmetics, 6 Ben. 543. 4 14 Wall. 44, 67; ante, § 174, p. 673.