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e Methods of Analysis of the Americon Society of Being Chemists, Sev ench Edison 1976. In reference to paragraph a of this section, this incorporation by reference was approved by the Director of the Federal Regis ter on March 23, 1981, and is available for inspection at the Office of the Federal Register, Room 8401, 1100 L

Street, NW., Washington, DC. This publication is available from the American Society of Brewing Chemists, 40 Pilot Knob Road, St. Paul, Minnesota 55121.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))

§ 25.252 Records.

(a) Production. The brewer shall keep records of the production of malt syrup, wort, and other articles which are removed from the brewery. The record shall include the quantities and kinds of materials used, and in the case of wort and concentrated wort, the balling.

(b) Removals. The brewer shall keep records of removals of brewer's yeast, malt and other articles from the brewery. The record shall include the quantity and date of removal of each lot, and the name and address of the consignee. These records may consist of invoices or shipping documents.

(c) Inspection. All records under this section shall be available for inspection at the brewery by an ATF officer during normal business hours.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))

Subpart R-Beer Concentrate

§ 25.261 General.

(a) Authorized processes. A brewer may, in accordance with this subpart

(1) Produce concentrate from beer, (2) Reconstitute beer from concentrate,

(3) Transfer concentrate from one brewery to another brewery of the same ownership, and

(4) Remove concentrate without payment of tax for exportation, or for transfer to and deposit in a foreigntrade zone for exportation or for storage pending exportation in accordance with Part 252 of this chapter.

(b) Brewery treatment of concentrate. Beer reconstituted from concentrate in accordance with this subpart shall (except with respect to the additional labeling of reconstituted beer under § 25.263) be treated the same as beer which has not been concentrated and reconstituted.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))

§ 25.262 Restrictions and conditions on processes of concentration and reconstitution.

(a) Conditions on concentration. A brewer may not employ any process of concentration which separates alcohol spirits from any fermented substance. (b) Conditions on reconstitution.

(1) The process of reconstitution of beer will consist of the addition to the concentrate of carbon dioxide and water only.

(2) A brewer may not employ any process of concentration or reconstitution unless the beer upon reconstitution will, without the addition of any substance other than carbon dioxide and water, possess the taste, aroma, color, and other characteristics of beer which has not been concentrated.

(3) The process of reconstitution shall provide for the addition of sufficient water to restore the concentrate to a volume not less than, and an alcohol content not greater than, that of the beer used to produce the concentrate.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1315, as amended, 1388, as amended (26 U.S.C. 5002, 5401))

§ 25.263 Production of concentrate and reconstitution of beer.

(a) Operations at brewery. A brewer may concentrate beer or reconstitute beer only at a brewery.

(b) Marking of containers. Containers of concentrate transferred to other breweries of the same ownership, and containers of concentrate removed for export shall be marked, branded and labeled in the same manner as prescribed for containers of beer in Subpart J of this part. All containers shall be identified as containers of beer concentrate.

(c) Mingling with beer. A brewer may not mingle concentrate with unconcentrated beer. A brewer may mingle reconstituted beer with other beer at the brewery.

(d) Additional labeling. Barrels, kegs, and bottles containing beer produced from concentrate will show by label or otherwise the statement

"PRODUCED FROM ... CONCENTRATE," the blank to be filled in with the appropriate class designation of the beer (beer, lager, ale, stout, etc.) from which the concentrate was made. The statement will be conspicuous and readily legible and, in the case of bottled beer, will appear in direct conjunction with, and as a part of, the class designation. All parts of the class designation will appear in lettering of substantially the same size and kind.

(e) Records and reports. Brewers producing concentrate and brewers reconstituting beer from concentrate shall keep the records and reports required by Subpart U of this part.

§ 25.264 Transfer between breweries.

(a) Authorized transfers. A brewer may remove from the brewery, without payment of tax, concentrate produced from beer for transfer to any other brewery of the same ownership (within the limits of ownership described in § 25.181).

(b) Record of concentrate transferred. When transferring concentrate between breweries, the shipping brewer shall prepare for each conveyance a serially numbered invoice or commercial record covering the transfer. The invoice will be clearly marked to indicate that concentrate produced from beer is being transferred. The invoice will contain the following information:

(1) Name and address of shipping brewer;

(2) Date of shipment;

(3) Name and address of receiving brewer;

(4) The number of containers transferred, the balling, percentage of alcohol by volume, and the total barrels of concentrate; and

(5) A description of the beer from which the concentrate was produced including the number of barrels, balling, and percentage of alcohol by volume.

(c) Disposition of invoice. On shipment of the concentrate, the shipping brewer shall send the original copy of the invoice to the receiving brewer and shall retain a copy for the brewery records. On receipt of the concentrate, the receiving brewer shall note on the invoice any discrepancies in the con

centrate received and retain the invoice in the brewery records.

Subpart S—Pilot Brewing Plants

§ 25.271 General.

(a) Establishment. A person may establish and operate a pilot brewing plant off the brewery premises for research, analytical, experimental, or developmental purposes relating to beer or brewery operations. Pilot brewing plants will be established as provided in this subpart.

(b) Authorized removals. Beer may be removed from a pilot brewing plant only for analysis or organoleptic examination.

(c) Transfers between brewery and pilot brewing plant. Subject to Subpart L of this part, beer may be transferred to a pilot brewing plant from a brewery of the same ownership, and beer may be transferred without payment of tax from a pilot brewing plant to a brewery of the same ownership.

(d) Other regulations applicable. The provisions of Subparts A, B, F, I, K, and of §§ 25.63, 25.64, and 25.21 are applicable to pilot brewing plants established under this subpart. Also, the provisions of §§ 25.72-25.75, 25.77, 25.92 and 25.94-25.105 relating to bonds, and consents of surety, and of §§ 25.131-25.134 are applicable to bonds and consents of surety given, and to changes in the proprietorship, location, and premises of pilot brewing plants established under this subpart. (Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))

§ 25.272 Application.

(a) Form of application. Any person desiring to establish a pilot brewing plant under the subpart shall file an application with the regional director (compliance). The application will be in writing and will include the following:

(1) Name and address of the applicant;

(2) Description of the premises and equipment to be used in the operations;

(3) Nature, purpose, and extent of the operations; and

(4) A statement that the applicant agrees to comply with all provisions of this part applicable to the operations to be conducted.

(b) Additional information. The regional director (compliance) may at any time before or after approval of an application, require the submission of

additional information necessary for administration of this part or for protection of the revenue.

(c) Authorization of operations. The regional director (compliance) may authorize the operation of a pilot brewing plant if it is determined that the plant will be operated solely for one or more of the purposes specified in § 25.271, and that operations will not jeopardize the revenue.

(d) Withdrawal of authorization. The regional director (compliance) may withdraw authorization to operate a pilot brewing plant if in his or her judgment, the revenue would be jeopardized by the operations of the plant.

(e) Commencement of operations. A person may not begin operation of a pilot brewing plant until the regional director (compliance) has approved the application required by this section.

(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))

brewing plant will be an amount equal to the potential tax liability of the maximum quantity of beer on hand, in transit to the plant, and unaccounted for at any one time, computed by multiplying the quantity of beer in barrels by the rate of tax in 26 U.S.C. 5051. The penal sum of the bond (or total penal sum if original and strengthening bonds are filed) may not exceed $50,000 or be less than $500.

(c) Conditions of bonds. The bond will be conditioned that the operator of the pilot brewing plant shall pay, or cause to be paid, to the United States according to the laws of the United States and the provisions of this part, the taxes, including penalties and interest for which the operator shall become liable, on all beer brewed, produced, or received on the premises.

(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))

§ 25.275 Special tax.

The special tax imposed on a brewer by 26 U.S.C. 5091 shall be paid in accordance with Subpart I of this part.

§ 25.276 Operations and records.

(a) Commencement of operations. A person may commence operation of a pilot brewing plant upon receipt of the approved application and bond.

(b) Reports. The operator of a pilot brewing plant is not required to file monthly reports with the regional director (compliance).

(c) Records. The operator of a pilot brewing plant shall maintain records which, in the opinion of the regional director (compliance), are appropriate to the type of operation being conducted. These records will include information sufficient to account for the receipt, production, and disposition of all beer received or produced on the premises, and the receipt (and disposition, if removed) of all brewing materials. These records will be available for inspection by an ATF officer.

(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))

§ 25.277 Discontinuance of operations.

When operations of a pilot brewing plant are to be discontinued, the operator shall notify the regional director

FAILURE TO PAY TAX

§ 25.177 Evasion of or failure to pay tax; failure to file a tax return.

Sections 5671, 5673, 5684, 6651, and 6656 of Title 26 United States Code provide penalties for evasion or failure to pay tax on beer or for failure to file a tax return.

(Act of Aug. 16, 1954, 68A Stat. 821, as amended, 826, as amended (26 U.S.C. 6651, 6656); sec. 201, Pub. L. 85-859, 72 Stat. 1408, 1410, as amended (26 U.S.C. 5671, 5673, 5684))

Subpart L-Removals Without Payment of Tax

TRANSFER TO ANOTHER BREWERY OF SAME OWNERSHIP

§ 25.181 Eligibility.

A brewer may remove beer without payment of tax for transfer to any other brewery of the same ownership. These removals include a removal from a brewery owned by one corporation to a brewery owned by another corporation if (a) one corporation owns the controlling interest in the other corporation, or (b) the controlling interest in each corporation is owned by the same person. Beer removed under this section may, while in transit, be reconsigned to another brewery of the same ownership or be returned to the shipping brewery.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))

time of removal from the consignor brewery, and the receiving brewer shall determine the quantity of beer received at the time of receipt at the consignee brewery. The brewer shall equip the consignor and consignee breweries with suitable measuring de vices to allow accurate determination of the quantities of beer to be shipped and received in bulk conveyances.

(Sec 201, Pub. L. 85-859, 72 Stat. 1389, a amended (26 U.S.C. 5414))

§ 25.184 Losses in transit.

(a) Liability for losses. The brewer i liable under the bond of the brewer to which beer is transferred for th tax on beer lost in transit. If th brewer reconsigns beer while in transi or returns beer to the shipping brew ery, the brewer is liable under th bond of the brewery to which the be is reconsigned or returned for the ta on beer lost in transit.

(b) Losses allowable without clair If loss of beer being transferred do not exceed two percent of the quanti shipped, the brewer is not required file a report of loss or a claim for lowance of the loss if there are nc cumstances indicating that the or any portion of the beer lost stolen or otherwise diverted to lawful purpose.

(c) Losses requiring claim beer during transit exceer cent of the quantity brewer shall submit a alties of perjury for tax on the enti shall bit the dire