production of an article intended for sale, of the article with respect to which the tax is imposed, but does not include the use of palm oil in the manufacture of iron or steel products, or tin plate or terne plate, or any subsequent use of palm oil residue resulting from the manufacture of iron or steel products, or tin plate or terne plate. SEC. 2478. CONTRACTS PRIOR TO JANUARY 26, 1934.

If (1) any person has, prior to January 26, 1934, made a bona fide contract for the sale on or after May 10, 1934, of any article wholly or in chief value of an article with respect to which a tax is imposed by this chapter or of any article with respect to which a tax is imposed by this section, and if (2) such contract does not permit the addition to the amount to be paid thereunder of the whole of such tax, then (unless the contract expressly prohibits such addition) the vendee shall pay so much of the tax as is not permitted to be added to the contract price. Taxes payable by the vendee shall be paid to the vendor at the time the sale is consummated and shall be returned and paid to the United States by the vendor in the same manner as other taxes under this chapter. In case of failure or refusal by the vendee to pay such taxes to the vendor, the vendor shall report the facts to the Commissioner, who shall cause collection of such taxes to be made from the vendee.

SEC. 2479. OTHER LAWS APPLICABLE.

All provisions of law (including penalties) applicable in respect of taxes imposed by section 2700 shall, insofar as applicable and not inconsistent with this chapter, be applicable in respect of the taxes imposed by this chapter.

SEC. 2480. COVERING OF COLLECTIONS INTO THE TREASURY.

All collections * * *shall, notwithstanding any other provisions of law, be covered into the general fund of the Treasury of the United States.

SEC. 2482. PUBLICITY OF RETURNS.

For provisions with respect to publicity of returns under this chapter, see subsection (a) (2) of section 55 [in the note following section 1604]. SEC. 2483. [PAYMENT OF PROCEEDS TO GUAM AND AMERICAN SAMOA.] All taxes collected under this chapter with respect to coconut oil wholly of the production of Guam or American Samoa or produced from materials wholly of the growth or production of Guam or American Samoa shall be held as separate funds and paid to the Treasury of Guam or American Samoa, respectively. No part of the money from such funds shall be used, directly or indirectly, to pay a subsidy to the producers or processors of copra, coconut oil, or allied products, except that this sentence shall not be construed as prohibiting the use of such money, in accordance with regulations prescribed by the Commissioner with the approval of the Secretary, for the acquisition or construction of facilities for the better curing of copra or for bona fide loans to copra producers of Guam or American Samoa.

CHAPTER 22 FISH, ANIMAL, AND VEGETABLE OILS

SEC. 2490. IMPOSITION OF TAX.

In addition to any other tax or duty imposed by law, there shall be imposed upon the following articles imported into the United States, unless treaty provisions of the United States otherwise provide, a tax at the rates set forth in section 2491, to be paid by the importer.

SEC. 2491. RATE OF TAX.

(a) [FISH AND ANIMAL OILS.-] Whale oil (except sperm oil), fish oil (except cod oil, cod-liver oil, and halibut-liver oil), marine animal oil, tallow, inedible animal oils, inedible animal fats, inedible animal greases, fatty acids derived from any of the foregoing, and salts of any of the foregoing; all the foregoing, whether or not refined, sulphonated, sulphated, hydrogenated, or otherwise processed, 3 cents per pound: Provided, That no whale oil (except sperm oil), fish oil, or marine animal oil of any kind (whether or not refined, sulphonated, sulphated, hydrogenated or otherwise processed), or fatty acids derived therefrom, shall be admitted to entry free from the tax herein provided, unless such oil was produced on vessels of the United States or in the United States or its possessions, from whales, fish, or marine animals or parts thereof taken and captured by vessels of the United States;

* * *

(b) VEGETABLE OILS.-] Sesame oil provided for in paragraph 1732 of the Tariff Act of 1930 [19 U. S. C. 1201], sunflower oil, rapeseed oil, kapok oil, hempseed oil, perilla oil, fatty acids derived from any of the foregoing or from linseed oil, and salts of any of the foregoing; all the foregoing, whether or not refined, sulphonated, sulphated, hydrogenated, or otherwise processed, 41⁄2 cents per pound;

1

1

(c) [MANUFACTURES AND COMPOUNDS.-] Any article, merchandise, or combination (except oils specified in section 2470), 10 per centum or more of the quantity by weight of which consists of, or is derived directly or indirectly from, one or more of the products specified above in this section or of the oils, fatty acids, or salts specified in section 2470, a tax at the rate or rates per pound equal to that proportion of the rate or rates prescribed in this section or such section 2470 in respect of such product or products which the quantity by weight of the imported article, merchandise, or combination, consisting of or derived from such product or products, bears to the total weight of the imported article, merchandise, or combination; but there shall not be taxable under this subsection any article, merchandise, or combination (other than an oil, fat, or grease, and other than products resulting from processing seeds without full commercial extraction of the oil content), by reason of the presence therein

1 The statute reads "paragraph."

2 The statute reads "subparagraph."

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of an oil, fat, or grease which is a natural component of such article, merchandise, or combination and has never had a separate existence as an oil, fat, or grease;

(d) [SEEDS.-] Hempseed, 1.24 cents per pound; perilla seed, 1.38 cents per pound; kapok seed, 2 cents per pound; rapeseed, 2 cents per pound; and sesame seed, 1.18 cents per pound;

(f) [EXEMPT USES OF RAPESEED OIL.-] The tax imposed under subsection (b) shall not apply to rapeseed oil imported to be used in the manufacture of rubber substitutes or lubricating oil, and the Commissioner of Customs shall, with the approval of the Secretary, prescribe methods and regulations to carry out this subsection.

(g) [EXEMPTION IN RESPECT OF CERTAIN COCONUT OIL.-] The taxes imposed by section 2490 shall not apply to any article, merchandise, or combination, by reason of the presence therein of any coconut oil produced in Guam or American Samoa, or any direct or indirect derivative of such oil.

SEC. 2492. CONSTRUCTION OF TAXING PROVISION.

Nothing in section 2491 shall be construed as imposing a tax in contravention of an obligation undertaken in any trade agreement entered into prior to August 21, 1936, under the authority of section 350 of the Tariff Act of 1930, as amended, c. 474, 48 Stat. 943 (U. S. C., Title 19, §1351), or as imposing a tax on the importation of glycerin or stearine pitch or on the importation of any article by reason of any component of such article derived directly or indirectly from a waste not named in section 2491.

SEC. 2493. ASSESSMENT AND PAYMENT.

The tax imposed under section 2490 shall be levied, assessed, collected, and paid in the same manner as a duty imposed by the Tariff Act of 1930 [46 Stat. 590; 19 U. S. C., chapter 4], and shall be treated for the purposes of all provisions of law relating to the customs revenue as a duty imposed by such act, except that

(1) the value on which such tax shall be based shall be the sum of (A) the dutiable value (under section 503 of such act [46 Stat. 731; 19 U. S. C. 1503]) of the article, plus (B) the customs duties, if any, imposed thereon under any provision of law;

(2) for the purposes of section 489 of such act [46 Stat. 725; 19 U. S. C. 1489] (relating to additional duties in certain cases of undervaluation), such tax shall not be considered an ad valorem rate of duty or a duty based upon or regulated in any manner by the value of the article, and, for the purposes of section 336 of such act [46 Stat. 701; 19 U. S. C. 1336] (the so-called flexible tariff provision), such tax shall not be considered a duty;

(3) such tax (except as specifically provided in section 2491 (g) with reference to certain products of Guam and American Samoa) shall be imposed in full notwithstanding any provision of law granting exemption from or reduction of duties to products of any possession of the United States.

SEC. 2494. REGULATIONS.

The Secretary shall prescribe and publish all needful rules and regulations for the enforcement of this chapter.

CHAPTER 23-NARCOTICS

SUBCHAPTER A-OPIUM AND COCA LEAVES

SEC. 2550. TAX.

(a) RATE.-There shall be levied, assessed, collected, and paid upon opium, isonipecaine, coca leaves, opiate, any compound, salt, derivative or preparation thereof, produced in or imported into the United States, and sold, or removed for consumption or sale, an internal revenue tax at the rate of 1 cent per ounce, and any fraction of an ounce in a package shall be taxed as an ounce. The tax imposed by this subsection shall be in addition to any import duty imposed on the aforesaid drugs. (b) BY WHOM PAID.-The tax imposed by subsection (a) shall be paid by the importer, manufacturer, producer, or compounder. (c) How PAID.

(1) STAMPS.-The tax imposed by subsection (a) shall be represented by appropriate stamps, to be provided by the Secretary. (2) ASSESSMENT.

For assessment in case of omitted taxes payable by stamp, see section 3311 and section 3640.

(3) OTHER METHODS.-Whether or not the method of collecting any tax imposed by this section or by section 3220 is specifically provided therein, any such tax may, under regulations prescribed by the Secretary, be collected by stamp, coupon, serial-numbered ticket, or such other reasonable device or method as may be neces sary or helpful in securing a complete and prompt collection of the tax. All administrative and penalty provisions of subchapters A, B and C of chapter 11, in so far as applicable, shall apply to the collection of any tax which the Secretary determines or prescribes shall be collected in such manner.

(4) CROSS REFERENCE.

For authority of the Secretary to delegate such powers and duties, see subchapter D [section 2606].

(d) REGISTRATION AND SPECIAL TAX.

For requirements on importers, manufacturers, producers, dealers and practitioners to register and pay special tax, see part V of subchapter A of chapter 27 [sections 3220 and following].

SEC. 2551. EXEMPTIONS.

(a) PREPARATIONS OF LIMITED NARCOTIC CONTENT.-The provisions of this subchapter and part V of subchapter A of chapter 27 shall not be construed to apply to the manufacture, sale, distribution, giving away, dispensing, or possession of preparations and remedies which do not contain more than two grains of opium, or more than one-fourth of a grain of morphine, or more than oneeighth of a grain of heroin, or more than one grain of codeine, or any salt or derivative of any of them, in one fluid ounce, or, if a solid or semisolid preparation, in one avoirdupois ounce; or to lini

ments, ointments, or other preparations which are prepared for external use only, except liniments, ointments, and other preparations which contain cocaine or any of its salts or alpha or beta eucaine or any of their salts or any synthetic substitute for them: Provided, That such remedies and preparations are manufactured, sold, distributed, given away, dispensed, or possessed as medicines and not for the purpose of evading the intentions and provisions of this subchapter and said part V: Provided further, That any manufacturer, producer, compounder, or vendor (including dispensing physicians) of the preparations and remedies mentioned in this section, lawfully entitled to manufacture, produce, compound, or vend such preparations and remedies, shall keep a record of all sales, exchanges, or gifts of such preparations and remedies in such manner as the Secretary shall direct. Such record shall be preserved for a period of two years in such a way as to be readily accessible to inspection by any officer, agent, or employee of the Treasury Department duly authorized for that purpose, and the State, Territorial, District, municipal, and insular officers named in section 2556, and every such person so possessing or disposing of such preparations and remedies shall register as required in section 3221 and, if he is not paying a tax under section 3220, he shall pay a special tax of $1 for each year, or fractional part thereof, in which he is engaged in such occupation, to the collector of the district in which he carries on such occupation as provided in part V of subchapter A of chapter 27.

(b) DECOCAINIZED COCA LEAVES. The provisions of this subchapter and part V of subchapter A of chapter 27 shall not apply to decocainized coca leaves or preparations made therefrom, or to other preparations of coca leaves which do not contain cocaine.

(c) GOVERNMENT AND STATE OFFICIALS.

(1) STAMPING DRUGS.-Officials of the United States, Territorial, District of Columbia, or insular possessions, State or municipal governments, who in the exercise of their official duties engage in any of the business described in part V of subchapter A of chapter 27, shall not be required to stamp the drugs mentioned in section 2550 (a), as hereinafter prescribed, but their right to this exemption shall be evidenced in such manner as the Secretary may by regulations prescribe.

(2) REGISTRATION AND PAYMENT OF TAX.

For exemption of cfficials of the United States, Territorial, District of Columbia, or insular possessions, State or municipal governments from the requirements as to registration and the payment of special taxes, see subsection (b) of section 3222.

(3) CROSS REFERENCE.

For authority of the Secretary to delegate such powers and duties, see subchapter D [section 2606].

[For exemption of certain opium poppies from the provisions of subchapter A, see section 9 of the act of December 11, 1942 (56 Stat. 1047; 21 U. S. C. 188h).]

SEC. 2552. STAMPS.

(a) AFFIXING. The stamps provided in subsection (c) (1) of section 2550 shall be so affixed to the bottle or other container as to securely seal the stopper, covering, or wrapper thereof.

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