Purchasing tobacco not branded or stamped;

SEC. 3366. Every person who purchases, or receives for sale, any manufactured tobacco or snuff which has not been branded or stamped acpenalty. cording to law, shall be liable to a penalty of fifty dollars for each offense.

SEC. 3367. [Repealed by Sec. 26, act October 1, 1890.]

SEC. 3368, as amended by Sec. 30, act October 1, 1890. Upon tobacco and snuff manufactured and sold, or Tax on tobacco removed for consumption or use, there shall be levied and collected the following taxes:

and snuff.

On snuff, manufactured of tobacco or any substitute for tobacco, ground, dry, damp, pickled, scented, or otherwise, of all descriptions, when prepared for use, a tax of six cents per pound. And snuff-flour, when sold, or removed for use or consumption, shall be taxed as snuff, and shall be put up in packages and stamped in the same manner as snuff.

On all chewing and smoking tobacco, fine-cut, cavendish, plug, or twist, cut or granulated, of every description; on tobacco twisted by hand or reduced into a condition to be consumed, or in any manner other than the ordinary mode of drying and curing, prepared for sale or consumption, even if prepared without the use of any machine or instrument, and without being pressed or sweetened; and on all fine-cut shorts and refuse scraps, clippings, cuttings, and sweepings of tobacco, a tax of six cents a pound.

The amending section to the above was as follows: —

SEC. 30, act October 1, 1890. That on and after the first day of January, eighteen hundred and ninety-one, the internal taxes on smoking and manufactured tobacco shall be six cents per pound, and on snuff six cents per pound.

It has been held, where the President signed a bill on the afternoon of March 3, 1875, that tobacco removed, stamped, and sold in the forenoon of that day did not become liable to an increase of tax provided for in said act; the act taking effect only from the point of time in said day when it was actually approved. Burgess v. Salmon, 7 Otto, 381.

The identity of snuff and "granulated tobacco "not conceded. Venable v. Richards, 15 Otto, 636. Same case,

1 Hughes, 325.

Stamps, how

nished, and

sold.

SEC. 3369. The Commissioner of Internal Revenue shall cause to be prepared suitable and special stamps for the payment of the tax on tobacco prepared, furand snuff, which shall indicate the weight and class of the article on which payment is to be made, and shall be affixed and canceled in the mode prescribed by the Commissioner of Internal Revenue, and stamps when used on any wooden package shall be canceled by sinking a portion of the same into the wood with a steel die, and also such export stamps as are required by law. Such stamps shall be furnished to the collectors requiring them, and each collector shall keep at all times a supply equal in amount to three months' sale thereof, and shall sell the same only to the manufacturers of tobacco and snuff in their respective districts who have given bonds as required by law, and to owners or consignees of tobacco or snuff, upon the requisition of the proper custom-house officer having the custody of such tobacco or snuff; and to persons required by law to affix the same to tobacco or snuff on hand on the first day of January, eighteen hundred and sixty-nine. And every collector shall keep an account of the number, amount, and denominate values of stamps sold by him to each manufacturer or other person aforesaid: Provided, That such stamps as may be

feited tobacco,

etc., sold under distraint or by order of court, etc.

which

required to stamp tobacco, snuff, or cigars, sold under Stamping for distraint by any collector of internal revenue, or for stamping any tobacco, snuff, or cigars have been abandoned, condemned, may or forfeited, and sold by order of court or of any government officer for the benefit of the United States, may, under such rules and regulations as the Commissioner of Internal Revenue shall prescribe, be used by the collector making such sale, or furnished by a collector to a United States marshal, or to any other government officer making such sale for the benefit of the United States, without making payment for said stamps so used or delivered; and any revenue collector using or furnishing stamps in manner as aforesaid, on presenting vouchers satisfactory to the Commissioner of Internal Revenue, shall be allowed credit for the same in settling his stamp account with the department : And provided further, That in case it shall appear that any abandoned, condemned, or forfeited tobacco, snuff, or cigars, when offered for sale, will not bring a price equal to the tax due and payable thereon, such goods shall not be sold for consumption in the United States; and upon application made to the Commissioner of Internal Revenue, he is authorized and directed to order the destruction of such tobacco, snuff, or cigars by the officer in whose custody and control the same may be at the time, and in such manner and under such regulations as the Commissioner of Internal Revenue may prescribe.

Destruction of forfeited tobacco, etc., when will not bring a price equal to the tax.

As to redeeming stamps spoiled or useless, or improperly or unnecessarily used, see Sec. 3426.

As to issue of duplicate stamps for restamping packages of tobacco from which the stamps have been lost or destroyed by accident, see Sec. 3315.

The term tax, as used in the last clause of Sec. 3369 R. S., is not intended to include import duties, and cigarettes, when forfeited, may be sold and delivered when they bring enough to pay the internal revenue tax, although they may not bring enough to pay that and customs dues. United States v. Fifty-nine Demijohns Aguardiente and Four Barrels of Cigarettes, District Court S. D. Florida, June 15, 1889, Locke, J., 39 Fed. Rep. 401.

de

Tobacco man

ufactured by one person for another, or

on shares; whom affixed;

stamps, by

fraud in such cases.

SEC. 3370. Whenever tobacco or snuff of any scription is manufactured, in whole or in part, upon commission or shares, or the material from which any such articles are made, or are to be made, is furnished by one person and made and manufactured by another, or the material is furnished or sold by one person with an understanding or agreement with another that the manufactured article is to be received in payment therefor or for any part thereof, the stamps required by law shall be affixed by the actual maker or manufacturer before the article passes from the place of making or manufacturing. And in case of fraud on the part of either of said persons in respect to said manufacture, or of any collusion on their part with intent to defraud the revenue, such material and manufactured articles shall be forfeited to the United States; and each party to such fraud or collusion shall be deemed guilty of a misdemeanor, and be fined not less than one hundred dollars nor more than five thousand dollars, and imprisoned for not less than six months nor more than three years. SEC. 3371, as amended by Sec. 14, act March 1, 1879 (20 Stat. 327). Whenever any manufacturer of tobacco, snuff, or cigars, sells, or cigars, sells, or removes for sale or consumption, any tobacco, snuff, or cigars, upon which a tax is required to be

Assessment of

tax on tobacco,

snuff, and cigars re

moved with

out stamps.

paid by stamps, without the use of the proper stamps, it shall be the duty of the Commissioner of Internal Revenue, within a period of not more than two years after such sale or removal, upon satisfactory proof, to estimate the amount of tax which has been omitted to be paid, and to make an assessment therefor, and certify the same to the collector. The tax so assessed shall be in addition to the penalties imposed by law for such sale or removal: Provided, however, That no such assessment shall be made until and after notice to the manufacturer of the alleged sale and removal to show cause against said assessment; and the Commissioner of Internal Revenue shall, upon a full hearing of all the evidence, determine what assessment, if any, should be made.

While the law does not in terms define or limit the number of pounds of material that may be used in the production of a given number of cigars, and while it holds the manufacturer liable to make return of all the cigars he makes and sells or removes, and to pay the tax thereon, whether he uses more or less material per thousand cigars in their production, it does clearly contemplate and require assessments to be made by the commissioner, upon proof sufficiently satisfactory to justify an estimate, of the amount of tax omitted to be paid; and it gives him the means of estimating the amount of tax omitted to be paid by furnishing him, with particular exactness, information which for any other purpose than such assessments would not be worth the labor and trouble of acquiring.

The accounts of cigar manufacturers in the United States for several years past show that less than twenty pounds of leaf are used, on an average, in making a thousand cigars. The assumption made by the government that each manufacturer ought to produce at least a thousand cigars from each twentyfive pounds of leaf, actual weight, or thirty pounds of damp resweated leaf, or fifteen pounds of stemmed leaf used, is lib