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issued pursuant thereto, shall pay a penalty of $100 and, on conviction, shall be fined not less than $100 nor more than $5,000, and be imprisoned not less than three months nor more than three years.

Every rectifier and wholesale liquor dealer who refuses or neglects to render transcripts or summaries in the form required by the Commissioner, with the approval of the Secretary, shall, upon conviction, be fined not more than $100 for each such neglect or refusal. (b) TRANSFER OF DUTIES.

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

SEC. 2858. EXEMPTION OF STATES FROM PROVISIONS OF SECTION

2857.

The provisions of section 2857 shall not apply to States and Commonwealths and liquor stores operated by such States and Commonwealths that maintain and make available to inspection by internal revenue officers such records as will enable such officers to readily trace all distilled spirits received and disposed of by them: Provided, That such States and Commonwealths, and the liquor stores operated by them, shall, upon the request of the Commissioner, furnish to the Commissioner such transcripts, summaries, and copies of their records as he shall require.

SEC. 2859. BOOKS OF DISTILLERS AS WHOLESALE DEALERS.

(a) REQUIREMENT. Every distiller shall keep daily a record of distilled spirits of his own production disposed of by him, and shall render under oath correct transcripts and summaries of such records. The records shall be kept and the transcripts shall be rendered in such form and under such rules and regulations as the Commissioner, with the approval of the Secretary, may prescribe.

The records required to be kept under the provisions of this section, and regulations issued pursuant thereto, shall be preserved for a period of four years, and during such period shall at all times be available, during business hours, for inspection and the taking of abstracts therefrom by the Commissioner or any internal revenue officer.

Every distiller who refuses or neglects to keep such records in the form prescribed by the Commissioner, with the approval of the Secretary, or to make entries therein, or cancels, alters, or obliterates any entry therein (except for the purpose of correcting errors) or destroys any part of such records, or any entry therein, or makes any false entry therein, or hinders or obstructs any internal revenue officer from inspecting such records or taking any abstracts therefrom, or neglects or refuses to preserve or produce such records as required by this chapter or by regulations issued pursuant thereto, shall pay a penalty of $100 and, on conviction, shall be fined not less than $100 nor more than $5,000, and be imprisoned not less than three months nor more than three years.

Every distiller who refuses or neglects to render the transcripts or summaries in the form as req ired by the Commissioner, with the approval of the Secretary, shall, upon conviction, be fined not more than $100 for each such neglect or refusal.

(b) TRANSFER OF DUTIES.

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

SEC. 2860. LIMITATION ON PURCHASES BY RECTIFIERS AND DEALERS.

It shall not be lawful for any rectifier of distilled spirits, or wholesale or retail liquor dealer, to purchase or receive any distilled spirits in quantities greater than 20 gallons from any person other than an authorized rectifier of distilled spirits, distiller, or wholesale liquor dealer. Every person who violates this section shall forfeit and pay $1,000: Provided, That this provision shall not be held to apply to judicial sales, or to sales at public auction made by an auctioneer, or to sales upon which no special tax accrues as enumerated and provided for in section 3251. This section shall not be held to prohibit a rectifier or liquor dealer from purchasing, in quantities greater than 20 wine gallons, the distilled spirits sold in one parcel as provided in section 3251 (c).

SEC. 2861. GAUGING, BRANDING, AND STAMPING RECTIFIED SPIRITS. (a) REQUIREMENT.-Whenever any cask or package of distilled spirits containing five wine gallons or more is dumped by a rectifier for rectification or filled and received from rectification for sale, shipment, or delivery, the same shall be gauged, marked, branded, and stamped by a storekeeper-gauger, whose duty it shall be to mark and brand the same and place thereon an engraved stamp, which shall state the date when affixed and the number of proof gallons, and shall be in such form as shall be prescribed by the Commissioner with the approval of the Secretary; but the Commissioner may, by regulations approved by the Secretary, provide that the gauging, marking, stamping, and branding of such packages so dumped for rectification, or received therefrom, be done by the rectifier instead of by a storekeeper-gauger.

(b) TRANSFER OF DUTIES.

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

SEC. 2862. STAMPING.

(a) REQUIREMENTS.- All blanks in any of the forms prescribed in section 2861 shall be duly filled in accordance with the facts in each case. And the stamps therein designated shall in every case be affixed to a smooth surface of the cask or other package, which surface shall not have been previously painted or covered with any substance, and so as to fasten the same securely to the cask or package, and shall be duly canceled, and shall then be immediately covered with a coating of transparent varnish or other substance, so as to protect them from removal or damage by exposure; and such affixing, cancellation, and covering shall be done in such manner as the Commissioner may by regulation prescribe.

(b) TRANSFER OF DUTIES.

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

SEC. 2863. MARKING AND STAMPING PACKAGES FILLED ON PREMISES OF WHOLESALE DEALERS.

(a) REQUIREMENTS.-Every package of distilled spirits containing five wine gallons or more, filled on the premises of a wholesale liquor dealer who has paid the special tax required by law, shall be marked, branded, and stamped by such wholesale liquor dealer in such manner and under such rules and regulations as the Commissioner, with the approval of the Secretary, may prescribe.

(b) TRANSFER OF DUTIES.

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

SEC. 2864. RETURNS OF WHOLESALE DEALERS.

For requirements as to rendering under oath correct transcripts and summaries of records in the case of wholesale liquor dealers, see section 2857 (a).

SEC. 2865. NONCOMPLIANCE BY RECTIFIERS AND WHOLESALE DEALERS WITH CERTAIN PROVISIONS, PENALTIES.

(a) IMPOSITION.-Every rectifier or wholesale liquor dealer who refuses or willfully neglects to comply with the requirements of sections 2813, 2861, and 2863 as to giving the said notice or the said return, and as to marking, branding, and stamping, in accordance with the law and the regulations made in pursuance thereof, the packages of spirits filled on his premises as aforesaid shall, for each such offense, be fined not less than $200 nor more than $1,000. (b) TRANSFER OF DUTIES.

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

SEC. 2866. EFFACEMENT OF STAMPS AND BRANDS ON EMPTIED PACKAGES.

Every person who empties or draws off, or causes to be emptied or drawn off, any distilled spirits from a cask or package bearing any mark, brand, or stamp, required by law, shall, at the time of emptying such cask or package, efface and obliterate said mark, stamp, or brand. Every such cask or package from which said mark, brand, or stamp is not effaced and obliterated as herein required shall be forfeited to the United States, and may be seized by any officer of internal revenue, wherever found. And every railroad company or other transportation company, or person who receives or transports, or has in possession with intent to transport, or with intent to cause or procure to be transported, any such empty cask or package, or any part thereof, having thereon any brand, mark, or stamp required by law to be placed on any cask or package containing distilled spirits, shall forfeit $300 for each such cask or package, or any part thereof, so received or transported, or had in possession with the intent aforesaid; and every boat, railroad car, cart, dray, wagon, or other vehicle, and all horses and other animals used in carrying or transporting the same, shall be forfeited to the United States. Every person who fails to efface and obliterate said mark, stamp, or brand, at the time of emptying such cask or package, or who receives any such cask or package, or any part thereof, with the intent aforesaid, or who transports the same, or knowingly aids

or assists therein, or who removes any stamp provided by law from any cask or package containing, or which had contained, distilled spirits, without defacing and destroying the same at the time of such removal, or who aids or assists therein, or who has in his possession any such stamp so removed as aforesaid, or has in his possession any canceled stamp, or any stamp which has been used, or which purports to have been used, upon any cask or package of distilled spirits, shall be deemed guilty of a felony, and shall be fined not less than $500 nor more than $10,000, and imprisoned not less than one year nor more than five years.

SEC. 2867. BUYING OR SELLING USED CASKS BEARING INSPECTION MARKS.

Whenever any person knowingly purchases or sells, with inspection marks thereon, any cask or package, after the same has been used for distilled spirits, he shall forfeit and pay the sum of $200 for every such cask so purchased or sold.

SEC. 2868. CHANGING STAMPS OR SHIFTING SPIRITS.

Whenever any person changes or alters any stamp, mark, or brand on any cask or package containing distilled spirits, or puts into any cask or package spirits of greater strength than is indicated by the inspection mark thereon, or fraudulently uses any cask or package having any inspection mark or stamp thereon, for the purpose of selling other spirits, or spirits of quantity or quality different from the spirits previously inspected therein, he shall forfeit and pay the sum of $200 for every cask or package on which the stamp or mark is so changed or altered, or which is so fraudulently used, and shall be fined for each such offense not less than $100 nor more than $1,000, and imprisoned not less than one month nor more than one year.

SEC. 2869. AFFIXING IMITATION STAMPS ON PACKAGES OF DISTILLED SPIRITS.

If any person shall affix, or cause to be affixed, to or upon any cask or package containing, or intended to contain, distilled spirits, any imitation stamp or other engraved, printed, stamped, or photographed label, device, or token, whether the same be designed as a trade mark, caution notice, caution, or otherwise, and which shall be in the similitude or likeness of, or shall have the resemblance or general appearance of, any internal revenue stamp required by law to be affixed to or upon any cask or package containing distilled spirits, he shall, for each offense, be liable to a penalty of $100, and, on conviction, shall be fined not more than $1,000, and imprisoned not more than three years, and the cask or package with its contents shall be forfeited to the United States.

SEC. 2870. PROHIBITED HOURS FOR REMOVAL OF SPIRITS.

No person shall remove any distilled spirits at any other time than after sun-rising and before sun-setting in any cask or package containing more than ten gallons from any premises or building in which the same may have been distilled, redistilled, rectified, compounded, manufactured, or stored; and every person who violates this provision shall be liable to a penalty of $100 for each cask, barrel, or package of spirits so removed; and said spirits, together with any vessel con

taining the same, and any horse, cart, boat, or other conveyance used in the removal thereof, shall be forfeited to the United States.

[For exemption of certain transfers, etc., from the provisions of section 2870, see section 2883 (c), (d), and (e).]

SEC. 2871. REGULATION OF TRAFFIC IN CONTAINERS OF DISTILLED SPIRITS.

Whenever in his judgment such action is necessary to protect the revenue, the Secretary is authorized, by the regulations prescribed by him, and permits issued thereunder if required by him (1) to regulate the size, branding, marking, sale, resale, possession, use, and re-use of containers (of a capacity of less than five wine gallons) designed or intended for use for the sale at retail of distilled spirits (within the meaning of such term as it is used in section 2803) for other than industrial use, and (2) to require, of persons manufacturing, dealing in, or using any such containers, the submission to such inspection, the keeping of such records, and the filing of such reports as may be deemed by him reasonably necessary in connection therewith. Whoever willfully violates the provisions of any regulation prescribed, or the terms or conditions of any permit issued pursuant to the authorization contained in this section, and any officer, director, or agent of any corporation who knowingly participates in such violation, shall, upon conviction, be fined not more than $1,000 or be imprisoned for not more than two years, or both; and, notwithstanding any criminal conviction, the containers involved in such violation shall be forfeited to the United States, and may be seized and condemned by like proceedings as those provided by law for forfeitures, seizures, and condemnations for violations of the internal revenue laws, and any such containers so seized and condemned shall be destroyed and not sold. Any requirements imposed under this section shall be in addition to any other requirements imposed by or pursuant to law and shall apply as well to persons not liable for tax under the internal revenue laws as to persons so liable.

Part III-Internal Revenue Bonded Warehouses

SEC. 2872. ESTABLISHMENT AND CONTROL.

The Commissioner is authorized, in his discretion, and upon the execution of such bonds as he may prescribe, to establish warehouses, to be known and designated as internal revenue bonded warehouses, to be used exclusively for the storage of spirits distilled at a registered distillery, each of which warehouses shall be in charge of a storekeeper-gauger. Every such warehouse shall be under the control of the district supervisor of the Alcohol Tax Unit district in which such warehouse is located, and shall be in the joint custody of the storekeeper-gauger and proprietor thereof, and kept securely locked, and shall at no time be unlocked or opened or remain open except in the presence of such storekeeper-gauger or other person who may be designated to act for him. No dwelling house shall be used for such a warehouse, and no door, window, or other opening shall be made or permitted in the walls of such warehouse leading into a distillery. Such warehouses shall be under such further regulations as the Commissioner, with the approval of the Secretary, may prescribe.

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