number named in the stamp and the decimal number next above. And whenever any collector receives the tax on the distilled spirits contained in any cask, he shall detach from the book a stamp representing the denominate quantity nearest to the quantity of proof spirits in such cask, as shown by the storekeeper-gauger's return, with such number of the coupons attached thereto as shall be necessary to make up the whole number of proof gallons in said cask. All unused coupons shall remain attached to the marginal stub, and no coupon shall have any value or significance when detached from the stamp and stub. And the tax-paid stamps with the coupons may denote such number of gallons, not less than ten, as the Commissioner may deem advisable.

(3) TRANSFER OF DUTIES.

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

(b) ISSUE FOR RESTAMPING. The Commissioner may, under regulations prescribed by him with the approval of the Secretary, issue stamps for restamping packages of distilled spirits, which have been duly stamped but from which the stamps have been lost or destroyed by unavoidable accident.

(c) INSTRUMENTS FOR ATTACHING, PROTECTING, AND CANCELING.The instruments or other means prescribed under section 3301 (a) for attaching, protecting, and canceling stamps for distilled spirits shall be furnished by the United States to the persons using the stamps to be affixed therewith, under such regulations as the Commissioner may prescribe.

(d) ACCOUNTABILITY.

(1) TAX-PAID STAMPS.-The books of tax-paid stamps issued to any collector shall be charged to his account at the full value of the tax on the number of gallons represented on the stamps and coupons contained in said books; and every collector shall make a monthly return to the Commissioner of all tax-paid stamps issued by him to be affixed to any cask or package containing distilled spirits on which the tax has been paid, and account for the amount of the tax collected; and it shall be the duty of the said collector to return to the Commissioner any book of marginal stubs as soon as all the stamps contained in the book when issued to him have been used.

(2) OTHER STAMPS.-All stamps relating to distilled spirits, other than the tax-paid stamps, shall be charged to collectors; and the books containing such stamps may be intrusted by any collector to the storekeeper-gauger of the district, who shall make a daily report to the collector of all such stamps used by him and for whom used; and when all the stamps contained in any such book have been issued, the storekeeper-gauger of the district shall return the book to the collector, with all the marginal stubs therein. Except as provided in section 2878 (b), all export stamps issued to collectors shall be charged to them as representing the value of 10 cents for each stamp, and they shall coilect the amount due for such stamps at the rate of 10 cents for each stamp issued, in such manner and at such time as the Commis

sioner may prescribe, and the Commissioner may, in his discretion, make assessment therefor.

(3) TRANSFER OF DUTIES.

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

(e) EXCHANGE OF WHOLESALE LIQUOR DEALERS' STAMPS FOR RECTIFIED SPIRITS STAMPS.-Collectors shall not furnish wholesale liquor dealers' stamps in lieu of and in exchange for stamps for rectified spirits unless the package covered by stamp for rectified spirits is to be broken into smaller packages.

SEC. 2803. STAMPS FOR CONTAINERS OF DISTILLED SPIRITS.

(a) REQUIREMENT.-No person shall transport, possess, buy, sell, or transfer any distilled spirits, unless the immediate container thereof has affixed thereto a stamp denoting the quantity of distilled spirits contained therein and evidencing payment of all internal revenue taxes imposed on such spirits. The provisions of this section shall not apply to

(1) Distilled spirits placed in a container for immediate consumption on the premises or for preparation for such consumption;

(2) Distilled spirits in bond or in customs custody;

(3) Distilled spirits in immediate containers required to be stamped under existing law;

(4) Distilled spirits in actual process of rectification, blending, or bottling, or in actual use in processes of manufacture;

(5) Distilled spirits on which no internal revenue tax is required to be paid;

(6) Distilled spirits not intended for sale or for use in the manufacture or production of any article intended for sale; or

(7) Any regularly established common carrier receiving, transporting, delivering, or holding for transportation or delivery distilled spirits in the ordinary course of its business as a common carrier.

(b) PURCHASE AND SUPPLY.-Any person placing or intending to place any distilled spirits upon which all internal revenue taxes have been paid into any container upon which a stamp is required by this section, or withdrawing or intending to withdraw any imported spirits in such containers from customs custody, shall be entitled to purchase sufficient stamps for stamping such containers. Such stamps shall be issued by the Commissioner to each collector, upon his requisition, in such numbers as may be necessary in his district, and shall be sold by the collectors to persons entitled thereto upon application therefor and compliance with regulations under this section, at a price of 1 cent for each stamp, except that in the case of stamps for containers of less than one-half pint the price shall be one-quarter of 1 cent for each stamp. When in his judgment there is no danger to the revenue, and upon the giving of such bonds or other security as he may deem necessary, the Commissioner may authorize the sale of such stamps to importers for stamping containers in the country from which imported.

2

*

(c) UNUSED STAMPS; EXCHANGE, REFUND, ETC.-The Commissioner, under regulations prescribed by him and approved by the Secretary, may redeem or make allowance for any unused stamps issued under * * subsection (b) of this section by exchanging them for other stamps of the same kind or by refunding moneys received therefor: Provided, That stamps may be exchanged or the value thereof refunded only in quantities of the value of $5 or more: And provided further, That no claim for the exchange of strip stamps or refund therefor shall be allowed unless presented within two years after the date on which such stamps were lawfully issued. There are hereby authorized to be appropriated annually, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary to carry out this provision.

[For postponements by reason of war, see section 3804.]

(d) REGULATIONS FOR ISSUING, AFFIXING, AND CANCELING STAMPS.The Commissioner, with the approval of the Secretary, shall prescribe (a) regulations with respect to the time and manner of applying for, issuing, affixing, and destroying stamps required by this section, the form and denominations of such stamps, proof that applicants are entitled to such stamps, and the method of accounting for receipts from the sale of such stamps, and (b) such other regulations as he shall deem necessary for the enforcement of this section.

(e) DESTRUCTION OF STAMPS.-Every person emptying any container stamped under the provisions of this section shall at the time of emptying such container destroy the stamp thereon.

(f) FORFEITURE OF SPIRITS.-All distilled spirits found in any container required to bear a stamp by this section, which container is not stamped in compliance with this section and regulations issued thereunder, shall be forfeited to the United States.

(g) PENALTIES.-Any person who violates any provision of this section, or who, with intent to defraud, falsely makes, forges, alters, or counterfeits any stamp made or used under this section, or who uses, sells, or has in his possession any such forged, altered, or counterfeited stamp, or any plate or die used or which may be used in the manufacture thereof, or any stamp required to be destroyed by this section, or who makes, uses, sells, or has in his possession any paper in imitation of the paper used in the manufacture of any such stamp, or who reuses any stamp required to be destroyed by this section, or who places any distilled spirits in any bottle which has been filled and stamped under this section without destroying the stamp previously affixed to such bottle, or who affixes any stamp issued under this section to any container of distilled spirits on which any tax due is unpaid, or who makes any false statement in any application for stamps under this section, or who has in his possession any such stamps obtained by him otherwise than as provided in subsection (b), shall on conviction be punished by a fine not exceeding $1,000, or by imprisonment at hard labor not exceeding five years, or by both. Any officer authorized to enforce any provisions of law relating to internal revenue stamps is authorized to enforce the provisions of this section The words "of Internal Revenue" are omitted.

2 The words "of the Treasury" are omitted.

and the provisions of section 2909 relating to the bottling of distilled spirits in bond.

(h) TRANSFER OF DUTIES.

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

[For definitions of "distilled spirits" and "person", as used in section 2803, see section 2809 (b) (2) and (e).

For stamps for spirits bottled in bond, see section 2903 (b).]

SEC. 2804. DETENTION OF CASKS OR PACKAGES ON SUSPICION.

(a) POWER OF REVENUE OFFICER.-It shall be lawful for any internal revenue officer to detain any cask or package containing, or supposed to contain, distilled spirits, when he has reason to believe that the tax imposed by law upon the same has not been paid, or that the same is being removed in violation of law; and every such cask or package may be held by him at a safe place until it shall be determined whether the property so detained is liable by law to be proceeded against for forfeiture; but such summary detention shall not continue in any case longer than 48 hours without process of law or intervention of the officer to whom such detention is to be reported. (b) TRANSFER OF DUTIES.—

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

SEC. 2805. DISTILLED SPIRITS SUBJECT TO FORFEITURE, DISTRAINT, OR JUDICIAL PROCESS.

(a) FORFEITURE.

(1) DELIVERY TO THE SECRETARY.-All distilled spirits, wine, and malt beverages forfeited, summarily or by order of court, under any law of the United States, shall be delivered to the Secretary to be disposed of as hereinafter provided.

(2) DISPOSAL BY THE SECRETARY.-The Secretary shall dispose of all distilled spirits, wine, and malt beverages which have been delivered to him pursuant to subsection (a)

(A) By delivery to such Government agencies as, in his opinion, have a need for such distilled spirits, wine, or malt beverages for medicinal, scientific, or mechanical purposes;

or

(B) By gift to such eleemosynary institutions as, in his opinion, have a need for such distilled spirits, wine, or malt beverages for medicinal purposes; or

(C) By destruction.

(3) LIMITATION ON DISPOSAL.-No distilled spirits, wine, or malt beverages which have been seized under any law of the United States may be disposed of in any manner whatsoever except after forfeiture and as provided in this section.

(4) REGULATIONS.-The Secretary is authorized to make all rules and regulations necessary to carry out the provisions of this section.

(5) REMISSION OR MITIGATION OF FORFEITURES.-Nothing in this section shall affect the authority of the Secretary, under the customs or internal revenue laws, to remit or mitigate the forfeiture, or alleged forfeiture, of such distilled spirits, wines, or

malt beverages, or the authority of the Commissioner, with the approval of the Secretary, to compromise any civil or criminal case in respect of such distilled spirits, wines, or malt beverages prior to commencement of suit thereon, or the authority of the Secretary to compromise any claim under the customs laws in respect of such distilled spirits, wines, or malt beverages.

(b) DISTRAINT OR JUDICIAL PROCESS.-Except as provided in section 3074, all distilled spirits sold by order of court, or under process of distraint, shall be sold subject to tax; and the purchaser shall immediately, and before he takes possession of said spirits, pay the tax thereon. If any tax-paid stamps are affixed to any such cask or package, such stamps shall be obliterated and destroyed by the collector or marshal before such sale: Provided, That in all cases wherein it shall appear that any distilled spirits offered for sale on distraint for taxes, where the taxes on such spirits have not been paid, or offered for sale for the benefit of the United States under order of court, will not, by reason of such spirits being below proof, bring a price equal to the tax due and payable thereon, but will bring a price equal to, or greater than, the tax on said spirits, computed only upon the proof gallons contained in the packages, without regard to the greater number of wine gallons contained therein, then, and in such case, upon sale being so made, tax-paid stamps to the amount required to stamp such spirits as if the tax thereon were only on the proof gallons thereof may, under such rules and regulations as the Commissioner shall prescribe, be used by the collector making such sale, or furnished by a collector to a United States marshal, or to any other government officer making such sale for the benefit of the United States, without making payment for said stamps so used or delivered. Any collector using or furnishing stamps in manner aforesaid, on presenting vouchers satisfactory to the Commissioner, shall be allowed credit for the same in settling his stamp account with the department. In such cases, the officer selling the distilled spirits shall affix, or cause to be affixed, to the same the tax-paid stamps so provided, and shall write across the face of such stamps the true number of proof and wine gallons contained in the package, the amount of tax actually paid thereon, and also the words "Affixed under provisions of Internal Revenue Code, section 2805 (b).” (c) CROSS REFERENCES.

(1) MARKS, BRANDS, AND STAMPS.-For other provisions relating to stamping, marking, and branding distilled spirits sold under distraint or judicial process, see section 3725.

(2) TRANSFER OF DUTIES.-For transfer of power and duties of Commissioner and his agents, see section 3170.

SEC. 2806. PENALTIES AND FORFEITURES. (a) CREATION OF FICTITIOUS PROOF.

(1) PENALTY. Every person who adds or causes to be added any ingredient or substance to any distilled spirits before the tax is paid thereon, for the purpose of creating a fictitious proof, shall be fined not less than $100 nor more than $1,000 for each cask or package so adulterated, and imprisoned not less than three months nor more than two years; and