fied Virgin Islands spirits or with Virgin Islands spirits subject to a different rate of rectification tax. Rect!fied Virgin Islands spirits may be mingled in bond with other rectified Virgin Islands spirits subject to the same rate of rectification tax, and unrectified Virgin Islands spirits may be mingled in bond with other unrectified Virgin Islands spirits, as the case may be, if the spirits to be mingled are homogeneous. Rectified Virgin Islands spirits may be mingled with other rectified Virgin Islands spirits subject to the same rate of rectification tax, and unrectified Virgin Islands spirits may be mingled, whether or not they are homogeneous, if the spirits are to be immediately tax determined and removed to bottling premises exclusively for use in taxable rectification. Rums or brandies from the Virgin Islands may be blended under the provisions of § 201.307 of this chapter: Provided, That if spirits are subject to rectification tax under section 7652, I.R.C., they may be blended only if they are subject to the same rate of rectification tax.

(72 Stat. 1367, 82 Stat. 1328, as amended; 26 U.S.C. 5234, 5232)

§ 170.133 Form 179, tax returns, and record of tax liability.

Separate applications for tax determination shall be prepared for Virgin Islands spirits on Form 179, and the words "Virgin Islands Spirits" shall be prominently shown on all copies of Form 179. Any rectification tax imposed under section 7652, I.R.C., on spirits withdrawn on tax determination shall be reported on Form 179 as "other tax due” and shall be identified as rectification tax incurred under section 7652, I.R.C., in the "Remarks" on the form, and such taxes shall be included, with the distilled spirits tax, in the tax returns filed on Form 2521, 2522, or 4077, as applicable, and in the record of tax liability maintained as provided in § 170.62.

MISCELLANEOUS PROVISIONS

§ 170.134 Abatement, remission, credit, or refund.

The provisions of 26 U.S.C. 5008, authorizing abatement, remission, credit and refund for loss or destruction of distilled spirits, shall apply to spirits brought into the United States from the Virgin Islands, with respect to the following:

(a) Spirits lost while in internal revenue bond;

(b) Voluntary destruction of spirits in bond;

(c) Voluntary destruction of spirits after withdrawal for rectification or bottling;

(d) Spirits lost after withdrawal for rectification or bottling, by reason of accident, flood, fire or other disaster;

(e) Spirits lost in rectifying, packaging, bottling and casing operations; (f) Spirits returned to bonded premises;

(g) Spirits returned to bonded premises after withdrawal upon tax determination;

(h) Spirits returned to the bottling premises from which removed; and

(i) Samples of spirits for use by the United States.

Claims relating to spirits lost in bond, in addition to the information required by § 201.43 of this chapter, shall show the name of the producer, and the serial number, and date of the Form 27-B Supplemental under which produced.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1364, as amended; Sec. 1905, Pub. L. 94-455, 90 Stat. 1818 (26 U.S.C. 5008, 5215).)

[T.D. ATF-42, 42 FR 8368, Feb. 10, 1977]

§ 170.135 Marks on containers.

(a) Packages received in bond. When packages of spirits are received on the bonded premises of a distilled spirits plant under the provisions of this subpart, the markings prescribed by § 250.206 of this chapter that are on such packages shall be accepted in lieu of the markings prescribed in § 201.312b of this chapter. On receipt of packages so marked the proprietor of the distilled spirits plant shall show on such packages (1) the date of origi

nal entry for deposit of the spirits, and (2) the words "Virgin Islands" or the abbreviation “V.I.”

or

(b) Other containers. Packages of Virgin Islands spirits filled in internal revenue bond or on bottling premises shall, in addition to the required marks prescribed in § 201.516 § 201.526 of this chapter, as applicable, be marked, in conjunction with the kind of spirits, to show the serial number of the approved formula under which produced, and with the words "Virgin Islands" or the abbreviation "V.I." Similarly, tanks or bulk conveyances ontaining spirits received in internal revenue bond under the provisions of this subpart shall, in addition to other required marks, be marked with the words "Virgin Islands" or the abbreviation "V.I."

(c) Cases of bottled alcohol. In addition to other mandatory marks prescribed by § 201.529(a) of this chapter for cases of bottled alcohol, the words "Virgin Islands" or the abbreviation "V.I." shall precede or follow the word "alcohol" on cases of alcohol from the Virgin Islands that are bottled and cased on bonded premises.

(72 Stat. 1360, 1369; 26 U.S.C. 5206, 5235)

(b) The amount of tax and the applicable rate or rates of tax imposed by section 7652, I.R.C., determined at the time of withdrawal from internal revenue bond on the Virgin Islands spirits contained in the product.

Subpart G-Temporary Regulations for the Transfer of Puerto Rican Spirits From Customs Custody to Internal Revenue Bond

SOURCE: T.D. 7155, 36 FR 25152, Dec. 29, 1971, unless otherwise noted. Redesignated at 40 FR 16835, Apr. 15, 1975.

§ 170.151 Scope of subpart.

The temporary regulations in this subpart prescribe the requirements necessary to implement section 5232, I.R.C., as it relates to spirits produced in Puerto Rico and brought into the United States in bulk containers. Such regulations provide for the transfer of such spirits to internal revenue bond, their storage in and withdrawal from bond, the determination of tax, the application of certain loss provisions, the filing of returns, reports, and claims, and the keeping of records.

§ 170.152 Applicability of other regulations.

(a) Subpart C of this part. The provisions of Subpart C of this part shall be applicable to spirits brought into the United States from Puerto Rico and transferred under the provisions of this subpart to internal revenue bond and any reference in Subpart C of this part to imported spirits shall be deemed to include spirits brought into the United States from Puerto Rico under the provisions of this subpart.

(b) Part 201 of this chapter. The provisions of Part 201 of this chapter shall, to the extent they are not in conflict with the provisions of this subpart, be applicable to spirits brought into the United States from Puerto Rico under the provisions of this subpart to the same extent as they apply to imported spirits.

(c) Part 250 of this chapter. The provisions of Subpart B, §§ 250.35, 250.40 (except as otherwise provided in § 170.171(a)), 250.41, and 250.43 of Subpart C, and Subpart D (except for

§ 250.52 and as otherwise provided in § 170.155), and § 250.86 of Subpart E, of Part 250 of this chapter shall be applicable in respect of spirits to be brought into the United States from Puerto Rico and transferred under the provisions of this subpart to internal revenue bond.

§ 170.153 Meaning of terms.

When used in this subpart, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meanings ascribed in Parts 201 and 250 of this chapter, subject to the following limitations:

(a) The term "in bond" shall refer to spirits possessed under bond to secure payment of the internal revenue tax imposed by section 7652, I.R.C.

(b) The term “Secretary” shall have the meaning ascribed in Part 250 of this chapter.

(c) The term "taxpaid" shall have the meaning ascribed in Part 201 of this chapter.

§ 170.154 Forms prescribed.

The Director, Alcohol, Tobacco and Firearms Division, is authorized to prescribe all forms required by this subpart. All of the information called for in each form shall be furnished, as indicated by the headings on the form and the instructions thereon or issued in respect thereto, and as required by this subpart.

(72 Stat. 1361; 26 U.S.C. 5207)

§ 170.155 Filing and disposition of Form 27-B Supplemental.

Formulas on Form 27-B Supplemental covering Puerto Rican spirits to be brought into the United States in bulk as provided in this subpart shall be submitted to the Director, Alcohol, Tobacco, and Firearms Division, as provided in § 250.55 of this chapter. The person shipping the spirits to the United States shall furnish a reproduced copy of the approved formula covering such spirits to the assistant regional commissioner of each region in which a consignee's distilled spirits plant is located. The copy shall be so furnished prior to the first shipment into the region of spirits produced

under the formula in question. Spirits to be brought into the United States under this subpart may be produced under a formula which bears a statement to the effect that the tax will be paid in Puerto Rico, as provided in § 250.50 of this chapter, without obtaining an amended formula. However, if a formula is submitted to cover only the production of spirits for shipment to the United States under the provisions of this subpart, the formula shall include a statement to that effect.

APPLICATION, PERMIT TO SHIP, AND TRANSFERS

§ 170.156 General provisions.

Distilled spirits brought into the United States from Puerto Rico in bulk containers of 5 gallons or more capacity may, under the provisions of this subpart, be withdrawn by the proprietor of a distilled spirits plant from customs custody and transferred in such bulk containers or by pipeline to the bonded premises of his plant, without payment of the internal revenue tax, including rectification tax, if any, imposed on such spirits by section 7652, I.R.C. Such spirits so withdrawn and transferred to a distilled spirits plant: (a) May not be bottled in bond under section 5233, I.R.C., (b) may be redistilled or denatured only if of 185 degrees or more of proof, and (c) may be withdrawn from internal revenue bond for any purpose authorized by Chapter 51, Internal Revenue Code, in the same manner as domestic distilled spirits. Spirits transferred from customs custody to the bonded premises of a distilled spirits plant under the provisions of this subpart shall be received and stored thereat, and withdrawn or transferred therefrom, subject to the provisions of this subpart and applicable provisions of Part 201 of this chapter. The person operating the bonded premises of the distilled spirits plant to which spirits are transferred under the provisions of this subpart shall become liable for the tax on distilled spirits withdrawn from customs custody under section 5232, I.R.C., upon release of the spirits from customs custody.

(82 Stat. 1328, as amended; 26 U.S.C. 5232)

§ 170.157 Application to receive spirits in bond.

(a) Application. The proprietor of a distilled spirits plant desiring to withdraw Puerto Rican spirits as authorized in § 170.156 of this subpart shall submit an application on Form 2609, in quintuplicate, to the assigned officer. The application shall not be approved unless the applicant's bond, Form 2601, is in the maximum penal sum, or, if in less than the maximum penal sum, is sufficient to cover the internal revenue tax on the spirits to be withdrawn in addition to all other liabilities chargeable against such bond, nor shall any application for withdrawal of Puerto Rican spirits in bulk conveyances be approved unless the applicant has provided suitable facilities as provided in § 201.239 of this chapter. (See § 170.158 of this subpart with respect to need for consent of surety on bond, Form 2601.) The applicant shall modify Form 2609 to show the name and address of the consignor in Puerto Rico from whose premises shipment will be made. He shall state in the "Remarks" item that the transfer is of Puerto Rican spirits from customs custody, and show the name and address of the assistant regional commissioner of the applicant's region, and, if containers other than those listed on Form 2609 are to be used, the type of container in which shipment will be made. When the assigned officer approves Form 2609, he shall retain one copy for his files, and return the original and three copies to the applicant. The applicant shall retain a copy of Form 2609 for his files, and forward the original and two copies to the consignor in Puerto Rico. The consignor shall retain a copy of Form 2609, deliver a copy to the revenue agent, and forward the original to the Secretary.

(b) Termination. An applicant may terminate an approved application, Form 2609, at any time by giving written notice to the revenue agent at the consignor premises who will retrieve the consignor's and Secretary's copies and, together with his own copy, return them to the consignee. The consignee shall return these copies to

gether with his own to the assigned officer for cancellation.

(68A Stat. 907, as amended, 72 Stat. 1322, 82 Stat. 1328, as amended; 26 U.S.C. 7652, 5007, 5232)

§ 170.158 Consent of surety on bond.

Application on Form 2609, prepared as provided in § 170.157, to receive Puerto Rican spirits shall not be approved unless the proprietor has filed a consent of surety on Form 1533 to extend the terms of his existing bond, Form 2601, if such bond was in effect before the effective date of this subpart. The consent shall contain a statement of purpose as follows:

To continue in effect such bond (including all extensions or limitations of terms and conditions previously consented to and approved), notwithstanding that the principal may, from time to time, withdraw from customs custody spirits brought into the United States from Puerto Rico under the provisions of 26 U.S.C. 5232.

§ 170.159 Application and permit to ship, Form 4776.

Before spirits of Puerto Rican manufacture may be shipped to the United States without payment of tax for withdrawal from customs custody and transfer to internal revenue bond, an application by the consignor on Form 4776 for permit to ship must be approved by the Secretary. All copies of the application (original and seven copies) shall be delivered to the revenue agent. The revenue agent shall gauge the spirits to be shipped, prepare a gauge report as prescribed by § 170.160 of this subpart and affix seals as prescribed by § 170.164 of this subpart. Such agent shall, after executing his certification on Form 4776, retain a copy of Form 4776 and a copy of the Form 2630 (if any), and forward all remaining copies of the forms to the Secretary within sufficient time to allow for approval and issuance of the permit as provided in § 170.161 of this subpart.

(82 Stat. 1328, as amended; 26 U.S.C. 5232) § 170.160 Gauge report.

Puerto Rican spirits to be withdrawn for shipment to the United States as provided in this subpart shall be

When the Secretary receives an application on Form 4776, he shall ascertain that the consignee has on file a currently valid Form 2609 for the spirits covered by the Form 4776. If the Secretary finds that the applicant is in compliance with law and regulations, he will execute his permit to ship on all copies of Form 4776, retain one copy of Form 4776 and any accompanying Form 2630, and return the original and remaining copies of each form to the consignor. The consignor shall retain one copy of Form 4776 and any accompanying Form 2630, dispatch one copy of Form 4776 and any accompanying Form 2630 on the vessel concerned for guidance of the customs officer who will inspect the cargo at the port of arrival in the United States, and forward the original and remaining copies of each form by mail to the director of customs at the port of arrival in the United States.

§ 170.162 Action by carrier.

The carrier of the spirits specified on the Form 4776 shall, at the time of unlading at the port of arrival in the United States, segregate and arrange the containers of spirits for convenient customs examination and shall assume any expense incurred in connection therewith.

§ 170.163 Customs inspection and release.

On receipt of a properly executed Form 4776 and any accompanying Form 2630 from the consignor, the customs officer at the port of arrival in the United States shall inspect shipments in bulk conveyances, and if the seals are intact, he shall release the shipment. If such seals are not intact,

the customs officer shall, before release of the shipment, affix customs seals. In addition, barrels, drums, or similar packages not shipped in a sealed van or other sealed conveyance shall be inspected, and if it appears that any such package has sustained a loss, it shall be weighed and reported on Form 2630 in triplicate. The serial numbers of any seals affixed by customs officers shall be reported on Form 4776 under remarks with an explanation and description of any evidence of loss. After completing his inspection, the customs officer shall execute his certificate on each copy of Form 4776 and show thereon any exceptions found at the time of his release for transfer of the spirits to internal revenue bond. Missing packages should be reported separately from packages which have sustained losses. The customs officer shall retain a copy of Form 4776 and a copy of each accompanying Form 2630. He shall then release the spirits to the consignee's representative, forward one copy of Form 4776 to the assistant regional commissioner at the address shown thereon, and forward the original and remaining copies of each form to the internal revenue officer at the distilled spirits plant.

(68A Stat. 907, as amended, 72 Stat. 1322, 82 Stat. 1328, as amended; 26 U.S.C. 7652, 5007, 5232)

§ 170.164 Bulk conveyances to be sealed.

When a shipment is made in a tank, van, or other bulk conveyance (other than barrels, drums, or similar packages that are not containerized), all openings affording access to the spirits shall be sealed by the Puerto Rican revenue agent in such manner as will prevent unauthorized removal of spirits without detection.

(68A Stat. 907, as amended, 72 Stat. 1322, 82 Stat. 1328, as amended; 26 U.S.C. 7652, 5007, 5232)

§ 170.165 Transfer by pipeline at dock.

If the distilled spirits plant is equipped with suitable dock facilities, the distilled spirits may, subject to all requirements of the customs laws and regulations, be transferred by pipeline from the vessel or barge through