Rev. Rul. 54-249

Advice is requested relative to the sale of distilled spirits, free of tax, to the Armed Services Medical Procurement Agency, and the procedure to be followed therefor.

Distilled spirits may be bottled in bond for sale, free of tax, to the Armed Services Medical Procurement Agency. Proprietors of internal revenue bonded warehouses may be authorized to proceed with the bottling of such spirits upon receipt of an order from the Armed Services Medical Procurement Agency in advance of the filing of the application on Form 543, `Application for the Withdrawal of Distilled Spirits Other than Alcohol, Free of Tax, Under the provisions of Section 3331, Internal Revenue Code, for Use of the United States,' in order that the serial numbers of the cases may be made available for inclusion in the required bond, Form 544, and the application, Form 543. In such case, a copy of the order from the Armed Services Medical Procurement Agency must be exhibited to the storekeeper-gauger and the spirits may not be shipped until the necessary permit on Form 1508, `Permit for Withdrawal of Distilled Spirits from Bond, Free of Tax, for Use of the United States,' has been received by the warehouseman.

If the spirits are bottled at 100%A1 of proof, the warehouseman may exercise an option regarding the use of green strip stamps on the bottles, based on a preference expressed in the contract by the Armed Services Medical Procurement Agency. However, in order that green strip stamps may be used the spirits must be eligible in all respects for designation as bottled-in-bond spirits in accordance with the provisions of Regulations 10. In the event green strip stamps are to be used, the bottles will be labeled as bottled-in-bond spirits in accordance with the applicable provisions of Regulations 10.

Where the contract calls for spirits of 100%A1 of proof but specifies that green strip stamps are not to be used, plain strips, bearing the legend `Bottled Especially for the Armed Services Medical Procurement Agency,' may be substituted therefor. If the spirits are eligible for designation as bottled-in-bond spirits, the bottles will be labeled as bottled-in-bond spirits.

Where the contract calls for spirits of less than 100%A1 of proof plain strips will be used in lieu of green strip stamps and such spirits, as well as spirits of 100%A1 not eligible for designation as bottled-in-bond spirits, will not bear bottled-in-bond caution notices or the designation `In Bond.' Government labels or strips of plain paper over the necks of the bottles must bear the legend `Bottled Especially for the Armed Services Medical Procurement Agency.'

The distilled spirits may not be stored elsewhere than in the internal revenue bonded warehouse. The bottling of distilled spirits for the Armed Services Medical Procurement Agency may be conducted simultaneously with the bottling in bond of spirits of 100%A1 of proof in the bottling-in-bond department of the internal revenue bonded warehouse provided the bottling lines are entirely separated from each other and the bottled spirits are stored separately.