[Code of Federal Regulations]
[Title 27, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR19.58]

[Page 315]
 
            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS
 
 CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE 
                                TREASURY
 
PART 19--DISTILLED SPIRITS PLANTS--Table of Contents
 
         Subpart D--Administrative and Miscellaneous Provisions
 
Sec. 19.58  Use of taxpaid distilled spirits to manufacture products unfit for beverage use.

    (a) General. Apothecaries, pharmacists, and manufacturers are not 
required to qualify as processors under 26 U.S.C. 5171 before 
manufacturing or compounding the following products, if the tax has been 
paid or determined on all of the distilled spirits contained therein:
    (1) Medicines, medicinal preparations, food products, flavors, 
flavoring extracts, and perfume, conforming to the standards for 
approval of nonbeverage drawback products found in Secs. 17.131-17.137 
of this chapter, whether or not drawback is actually claimed on those 
products. Except as provided in paragraph (c) of this section, a formula 
need not be submitted if drawback is not desired.
    (2) Patented, patent, and proprietary medicines that are unfit for 
use for beverage purposes.
    (3) Toilet, medicinal, and antiseptic preparations and solutions 
that are unfit for use for beverage purposes.
    (4) Laboratory reagents, stains, and dyes that are unfit for use for 
beverage purposes.
    (5) Flavoring extracts, syrups, and concentrates that are unfit for 
use for beverage purposes.
    (b) Exceptions; products classed as beverages. Products specified 
under part 17 of this chapter as being fit for beverage use are 
alcoholic beverages. Bitters, patent medicines, and similar alcoholic 
preparations which are fit for beverage purposes, although held out as 
having certain medicinal properties, are also alcoholic beverages. Such 
products are required to be manufactured on the bonded premises of a 
distilled spirits plant, and are subject to the provisions of this part.
    (c) Formulas and samples; when required. On request of the Director, 
or when in doubt as to the classification of a product, the manufacturer 
shall submit to the Director the formula for and a sample of the product 
for examination to verify the manufacturer's claim of exemption from 
qualification requirements.
    (d) Change of formula; when required. If the regional director 
(compliance) finds at any time that any product manufactured under 
paragraph (a) of this section is being used for beverage purposes, or 
for mixing with beverage spirits other than by a processor, he or she 
shall notify the manufacturer to desist from manufacturing the product 
until the formula is changed to make the product not susceptible of 
beverage use and the change is approved by the Director. (However, the 
provisions of this paragraph shall not prohibit such products, which are 
unfit for beverage use, from being used in small quantities for 
flavoring drinks at the time of serving for immediate consumption.) 
Where, pursuant to notice, the manufacturer does not desist, or the 
formula is not so modified as to make the product unsusceptible of 
beverage use, the manufacturer shall immediately qualify as a processor.

(Sec. 805, Pub. L. 96-39, 93 Stat. 275, 278 (26 U.S.C. 5002, 5171))

[T.D. ATF-379, 61 FR 31425, June 20, 1996]

                       Authorities of the Director