[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: 27CFR19.67]

[Page 317]
 
            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. 19.67  Spirits produced in industrial processes.

    (a) Applicability. (1) Persons who produce spirits in industrial 
processes (including spirits produced as a by-product in connection with 
chemical or other processes) are distillers and are required to qualify 
and pay special (occupational) tax under provisions of 26 U.S.C. Chapter 
51 and this part.
    (2) The Director may, however, waive any provision of 26 U.S.C. 
Chapter 51, or of this part, with respect to the production of 
nonpotable chemical mixtures containing spirits, including any provision 
relating to qualification (except the payment of special (occupational) 
tax), if such mixtures are produced:
    (i) For transfer to the bonded premises of a distilled spirits plant 
for completion of distilling; or
    (ii) As a by-product which would require expensive and complex 
equipment for the recovery of spirits.
    (3) The waiver under the provisions of paragraph (a)(2)(ii) of this 
section is further conditioned that such mixture would:
    (i) Be destroyed on the premises where produced; or
    (ii) Contain a minimum quantity of spirits practicable with the 
procedure employed, not be subjected to further operations solely for 
the purification or recovery of spirits, and be found by the Director to 
be as nonpotable and at least as difficult with respect to recovery as 
completely denatured alcohol.
    (b) Application for waiver. (1) When the producer of nonpotable 
mixtures desires to secure a waiver of designated provisions of 26 
U.S.C. Chapter 51, or this part, he shall file an application with the 
Director through the regional director (compliance).
    (2) The application shall include, as applicable--
    (i) Name and address of producer;
    (ii) Chemical composition and source of the nonpotable mixture;
    (iii) Approximate percentages of chemicals and spirits in the 
mixture;
    (iv) Method of operation proposed;
    (v) Bonded premises where the mixture will be distilled; and
    (vi) Other pertinent information required by the Director.
    (c) Approval. If the Director finds that the waiver of the 
requirements, or any of them, will not jeopardize the revenue and will 
not unduly hinder supervision of the operations, he may approve the 
application under such terms and conditions as he deems advisable and 
subject to the furnishing of any bond which he deems necessary.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53 
FR 17543, May 17, 1988]