whom intended, the goods must be labeled "Notify (purchaser's name)," and the bill of lading must be indorsed, not in blank, but specifically to the purchaser on whom draft is drawn and whose name appears on the shipping tag, in order that the identity of the purchaser and the goods intended for him may both be clearly determined. Where these conditions are fully complied with this office holds that the sale is completed at the point of shipment, notwithstanding the qualified control retained by the shipper until the draft is settled. It is necessary, of course, in order to avoid liability to special tax at the place of delivery, that there should be in every case a bona fide order received and accepted at the place where special-tax stamp to cover sales is held. All previous rulings or decisions in conflict with the position herein taken are hereby revoked. Respectfully, Mr. BERNARD BETTMANN, JOHN G. CAPERS, Commissioner. Collector Internal Revenue, Cincinnati, Ohio. (T. D. 1427.) Marking spirits. Application for an injunction pendente lite to enjoin the collector of internal revenue from carrying out Circular 723 of May 5, 1908, issued in conformity with the direction of the President to the Secretary of Agriculture for the inforcement of the pure-food act with reference to the marking and branding of the products of distilleries as "alcohol" instead of spirits.- Decision of the United States circuit court, northern district of California, denying motion for injunction. TREASURY DEPARMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., October 17, 1908. The appended decision of the United States circuit court, northern district of California, in the case of Western Distilleries v. August Muenter, collector, et al., is published for the information of internalrevenue officers and others concerned. JOHN G. CAPERS, Commissioner. IN THE CIRCUIT COURT OF THE UNITED STATES, NINTH JUDICIAL CIRCUIT, NORTHERN DISTRICT OF CALIFORNIA. SEPTEMBER 28, 1908. Western Distilleries v. August Muenter, etc., et al. VAN FLEET, J. (Orally): This is an application for an injunction pendente lite. The bill seeks to enjoin the collector of internal revenue for this district from carrying out certain regulations recently adopted and put in force by the Treasury Department, with reference to the marking and branding of the products of distilleries. This particular regulation provides that a certain product heretofore designated under the regulation of the Department as spirits shall hereafter be branded and designated as alcohol. The bill sets up that the regulation is in the first place in contravention of section 3287 of the Revised Statutes in that it is not a marking in accord with the requirements of that provision, and in the next place that if so marked it will not properly or correctly designate the output of the distillery which is covered by that regulation, but will be misleading to the public. I have examined the question very carefully. It is stated in the bill that the circuit court for the western division of the southern district of Ohio has heretofore granted an injunction of a similar character in a case brought before it, and the opinion or memorandum filed by the court in granting that injunction is presented for my consideration. I have examined the provisions of section 3287 in the light of that decision and the provisions of the food and drugs act, which I should have suggested is the act under which it is claimed the present regulation has been adopted by the Commissioner of Internal Revenue, and I am satisfied, in the first place, that the regulation here sought to be set aside is not in violation of section 3287—that is, not necessarily at variance with it; but if there be any doubt of that it is very clearly within the provisions of the food and drugs act, which is the more recent legislation on the subject. An examination of the latter act shows that Congress thereby very evidently intended to adopt a full and complete regulation and method for the marking and branding of all foods, drugs, and liquors that are put forth for human consumption; and that this regulation by the Treasury Department is strictly in accordance with the provisions of that act. If there is any conflict therefore between the two statutes, the latter should prevail. Of course if the regulation could be held in contravention of the statute the bill does make out a case of some injury and hardship to the complainant. There is no doubt about that. It sets up that they have been compelled to shut down their distillery by reason of the fact that they can not dispose of their product, which is now required to be marked alcohol, under that designation at all. It is alleged that this product has been known to the trade for a period of some forty years as spirits; that the purposes and uses of spirits as known to the trade and that which is properly designated alcohol are so essentially different that the designation of spirits as alcohol conveys an absolutely different meaning to the trade; and that they can not dispose of the former under that designation. But as is aptly suggested by the United States attorney, these circumstances ought not to work complainants a great deal of harm because as every distiller is required under the law to have his goods designated in precisely the same way, the trade could not get any product which would be marked differently, and this difficulty would adjust itself. It seems to me this is largely true, and the showing on behalf of the respondent is such as to satisfy my mind, as I stated a moment ago, not only that the regulation is proper under the law, but that it is entirely in harmony with what the real designation of the output should be; that it is in fact alcohol and not spirits in the sense in which those designations should be properly understood. The motion for an injunction will be denied. (T. D. 1428.) Manner of keeping leaf-tobacco dealers' books. Leaf-tobacco dealers' books, Form 59, to be kept in the manner described in Regulations 8, which are not modified by Circular 729 (T. D. 1394) TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, To collectors of internal revenue : Washington, D. C., October 17, 1908. The attention of this office has been called to the omission in paragraph 8 of Circular 729 (T. D. 1394) of the words "by manufacturers of tobacco and cigars" as they occur in Regulations 8, page 13, fourth full paragraph, resulting as alleged in a modification of the established regulations. It is stated that some collectors have so interpreted said circular as to require leaf-tobacco dealers who sell to other dealers in leaf tobacco to make entries of their purchases and sales in a manner different from that prescribed in Regulations 8. This was not the intention of this office. In order that the mode of entries shall be uniform for all leaftobacco dealers, it will be sufficient if the instructions contained in Regulations 8 are strictly complied with, and Circular 729 is hereby modified to that extent. The prime object of leaf-tobacco dealers' books is to afford a method of tracing leaf tobacco from its source to the manufacturer of tobacco, snuff, or cigars, so that the taxes imposed on tobacco products may be secured. Any irregularities discovered in the handling of leaf tobacco by dealers therein or by manufacturers of tobacco, snuff, or cigars will be promptly reported to this office. JOHN G. CAPERS, Commissioner. (T. D. 1429.) Special tax-Caterers serving banquets. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., October 13, 1908. SIR: This office is in receipt of your letter of the 8th instant relative to the practice of caterers serving banquets where liquors are furnished, and specifically to the case of a retail liquor dealer who built a hall for dancing and other entertainments across the street from his saloon, and on December 31 served a dinner in this hall to the of which he is a member.. society, In reply, you are advised that inasmuch as the contract for the furnishing of the dinner including beer was made at the place of business where Mr. holds special-tax stamp to cover sales, no liability appears to have been incurred through the serving of the liquor at a different locality provided the sale was of such nature as might be made by him under the protection of his retail special-tax stamp. The question of whether or not he incurred liability as a wholesale malt liquor dealer by reason of this contract is a more difficult one to determine. If the dinner was paid for out of the funds of the organization and included a wholesale quantity of malt liquor, he would unquestionably be reliable to the special tax. In view, however, of the fact that the dinner was served at so much per plate, including a certain quantity of beer, this office is inclined to hold that the officers of the organization in contracting for the dinner were acting as the agents of the individual members who participated, and not of the organization as an entity, and in that view of the case Mr. retail special-tax stamp is sufficient to cover sales of the malt liquor served to any one individual. Respectfully, ROBT. WILLIAMS, Jr., Acting Commissioner. Mr. FRANK MCCORD, Collector Internal Revenue, Cleveland, Ohio. (T. D. 1430.) Stills manufactured. Tax must be paid upon a doubler as a still manufactured, and on a condenser used for distilling as a worm manufactured. TREASURY Department, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., October 22, 1908. SIR: This office is in receipt of your letter of the 16th instant, transmitting an inquiry from of Louisville, relative to the taxability of doublers and condensers manufactured by them. Messrs. state that it has been their practice to pay upon each doubler manufactured as upon a still and upon each condenser manufactured as upon a worm, and you are informed that in the opinion of this office such practice is in conformity with the requirements of law and should be continued. should be so advised. Messrs. Respectfully, ROBT. WILLIAMS, Jr., Deputy Commissioner. Mr. Jos. A. CRAFT, Collector Internal Revenue, Louisville, Ky. (T. D. 1431.) Special tax-Retail liquor dealer. Retail liquor dealer returning goods to wholesale dealer from whom purchased and receiving other goods in exchange does not incur liability as wholesale liquor dealer. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., November 10, 1908. SIR: In reply to your letter of the 2d instant, you are informed that under a long-standing ruling of this office a retail liquor dealer who purchases and receives goods on his premises and places them in stock and afterwards decides that part of the goods received are for any reason not acceptable to him, and sends such part of the goods as are objectionable back to the wholesale dealer from whom he purchased same and requests that other goods be substituted, does not incur liability as wholesale liquor dealer by reason of such exchange. Respectfully, JOHN G. CAPERS, Commissioner. Mr. B. D. CROCKER, Collector Internal Revenue, Tacoma, Wash. Display of sign reading 66 as (T. D. 1432.) Distillers' sign. Distilling Company," except by qualified distiller, is illegal, unless followed by words removing the presumption that the dealer i s a distiller. 66 'TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., November 11, 1908. SIR: In reply to your letter of the 3d instant, you are advised that the use of the word "Distilling" in the sign of a retail liquor dealer, Distilling Company," by a person who is not a qualified distiller is held by this office to be a violation of section 3279, Revised Statutes, unless such sign also contains the qualifying words "Retail liquor dealer," thus removing the presumption that the firm is an authorized distiller. Respectfully, Mr. F. VON BAUMBACH, JOHN G. CAPERS, Commissioner. Collector Internal Revenue, St. Paul, Minn. (T. D. 1433.) Bottling of spirits in bond. No foreign materials to be added. TREASURY Department, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., November 13, 1908. SIR: Yours of 11th instant is received stating that you are about to commence to bottle a lot of whisky for your trade, and that several of your customers desire an addition of a little caramel for coloring and a small portion of rock-candy sirup before it is bottled in bond. These parties state that without the caramel and sirup the proof of 100 per cent is too fiery for their trade. You ask if this can be done. |