Rev. Rul. 56-313

Advice has been requested (1) whether drawback should be allowed on the contents of missing bottles not covered by the landing certificate where evidence of foreign landing was not requested by the Assistant Regional Commissioner, Alcohol and Tobacco Tax, but was submitted voluntarily by the exporter in conjunction with the evidence required by items (a), (b), and (c) of section 252.114 of the Regulations relating to Drawback on Liquors Exported, and (2) whether drawback should continue to be disallowed on the contents of missing containers where shortages are disclosed in landing certificates where such certificates are required by the Assistant Regional Commissioner under subsection (d) of that section.

Section 5062(b) of the Internal Revenue Code of 1954 makes provision for the allowance of a drawback equal in amount to the tax paid on domestic distilled spirits and wines packaged or bottled especially for export, upon the exportation thereof, and authorizes the Secretary or his delegate to prescribe regulations governing the determination and payment of drawback of internal revenue tax on domestic distilled spirits and wines, including the requirement of such notices, bonds, bills of lading and other evidence of payment of tax and exportation as shall be deemed necessary.

Section 252.114 of the Regulations relating to Drawback on Liquors Exported provides that exportation may, for the purpose of allowing such claims for drawback, be evidenced by (a) a copy of the export bill of lading issued by the exporting carrier, or (b) a certificate by the agent or representative of the export carrier showing actual exportation of the distilled spirits or wines, or (c) a certificate by an Armed Services Port Transportation Officer, as to the lading of the distilled spirits or wines for a for a foreign destination when shipped for exportation for use of the Armed Services of the United States, or (d) a certificate of foreign landing whenever the Assistant Regional Commissioner, Alcohol and Tobacco Tax, has reason to believe that the shipment is not a bona fide exportation.

In view of the forms of evidence acceptable in support of a drawback claim contained in items (a), (b), and (c) of section 252.114, landing certificates are not submitted in most cases. However, where a landing certificate is furnished, whether voluntarily or pursuant to request made by the Assistant Regional Commissioner as authorized in item (d) of section 252.114, and such landing certificate shows one or a number of bottles missing, drawback should be disallowed on such shortage. However, drawback should be allowed on the contents of `broken' bottles as distinguished from `missing' bottles, provided the breakage occurred subsequent to lading.