Rev. Rul. 54-417

Advice is requested relative to the refunding of internal revenue tax paid on imported vermouth which was subsequently returned to the shipper abroad.

A quantity of vermouth, having been found by examination by the importer after withdrawal from customs custody to be unfit for sale, was returned to the shipper abroad. The vermouth was not processed in any manner after receipt in this country and prior to its return to the foreign country.

Section 3030(a) of the Internal Revenue Code of 1939 imposes taxes at the rates specified therein on wines produced in or imported into the United States. Section 3030(b) provides that such taxes shall be paid by stamp on removal of the wines from the customhouse, winery, or other bonded place of storage for consumption or sale.

The vermouth, brought into the United States from a foreign country, was subject to the internal revenue tax at the time of its withdrawal from customs bond. There is no authority of law whereby the internal revenue tax actually due and paid on the vermouth when withdrawn from customs may be returned even though the product was subsequently returned to the shipper in the foreign country.