Rev. Rul. 56-338

Section 187.130 of the Regulations relating to Drawback on Distilled Spirits Used in Manufacturing Nonbeverage Products requires that every person intending to claim drawback on distilled spirits used in the manufacture of nonbeverage products must keep permanent records showing certain specified information. Though no particular form of record is required (section 197.132), the information must appear on original records made at the time of the transactions by a person having actual knowledge thereof. Necessary transcripts and summaries must be based upon the original records. Manufacturers must accurately weigh or measure all distilled spirits used and record the quantity so used immediately in a permanent record. In determining the quantity of distilled spirits used, adjustments should be made, where necessary, for temperature variation, i.e. , if the temperature of the spirits is substantially above or below 60 degrees Fahrenheit. It is also necessary that the manufacturer determine, preferably by weight, and record as received the exact quantity of spirits contained in each package at the time of receipt. Any losses in transit must be determined and such losses must not be taken up on the records as distilled spirits received. Any losses due to leakage, spillage, evaporation, etc., after receipt, must be accurately recorded at the time they occur.