Appeal from the District Court of the United States for the District of New Jersey; Guy L. Fake, Judge.
Before MARIS, BIDDLE, and JONES, Circuit Judges.
By Joint Resolution of Congress approved June 18, 1934, 48 Stat. 1020, 26 U.S.C. § 1162a, 26 U.S.C.A. Internal Revenue Code § 2811 it was provided: "That every person disposing of any substance of the character used in the manufacture of distilled spirits shall, when required by the Commissioner, render a correct return in such form and manner as the Commissioner, with the approval of the Secretary of the Treasury, may by rules and regualtions prescribe, showing the names and addresses of the persons to whom such disposition was made, with such details as to the quantity so disposed of or other information wich the Commissioner may require as to each such disposition, as will enable the Commissioner to determine whether all taxes due with respect to any distilled spirits manufactured from such substances have been paid. Any person who willfully violates any provision hereof or of any such rules or regulations and any officer, director or agent of any such person who knowingly participates in such violation, shall upon conviction be fined not more than $500 or be improsoned for not more tahn one year, or both. * * * "
Regulations 17 (amended), promulgated thereunder by the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury, provide in part:
"(c) 'Substance' shall mean cane molasses of the grade commonly known as blackstrap molasses; dehydrated molasses; corn sugar, beet sugar, and cane sugar; hydrol; sugar syrup, i.e. any known corn derivative containing more than 60% reducing sugar calculated as dextrose on a dry basis; yeast; cider; malt; oak chips, charred and not charred.
"Every person in the United States who consigns, sells or otherwise disposes of any substance, as defined in paragraph (c) of Article I of these regulations. shall, when required in writing by the Commissioner for the purpose of determining whether all taxes due with respect to any distilled spirits manufactured from such substances have been apid, render in writing a correct return under oath showing (1) the date of the consignment, sale, or other disposition of the substance; (2) the quantity and kind of the substance consigned, sold, or otherwise dispsed of; (3) the name and complete address of the purchaser, or person to whom dispostion is made, and if the sale or disposition is made by or through any other person, the name and complete address of such other person; (4) the name and complete address of the consignee; (5) the date and mehod of shipment or delivery, such as by truck, or other conveyance, and the state or city registration number of such truck, or other conveyance, if any; (6) the name and complete address of the driver of such truck, or other conveyance, as shown by the driver's operator's license, if any, giving the number of the license and the date of issuance; (7) the name and complete address of the person to whom actual delivery has been, or is to be, made; and (8) the exact date of such delivery, or proposed delivery. Where shipment is made by a common carrier, such as a railroad, trucking company, steamboat line, etc., the information required by subdivisions (5) and (6) of this Article need not be reported, but in lieu thereof there shall be furnished the complete routing of the shipment.
"Returns shall be filed with the Commissioner, or with an officer or employee of the Bureau of Internal Revenue designated by the Commissioner to receive the returns for him, not later than ten days after the receipt of the notice requiring the same to be filed, unless the Commissioner shall specify a shorter period of time within which the return is to be made.
"Every person in the United States who consigns, sells, or otherwise disposes of any substance, as defined in paragraph (c) of Article I of these regulations, shall keep at his place of business such books, records, documents, papers, invoices, bills of lading, etc., relating to or connected with any such consignment, sale, or other disposition, as will enable such person to make the return provided for by Article II of these regulations: Provided, Taht, unless the Commissioner shall, in writing, notify any such person so to do, he shall not be required to keep such books, records, documents, papers, invoices, bills of lading, etc., when the consignment, sale, or other disposition of any such substances at the same time, does not exceed the following: (a) 300 pounds of cane, corn, or beet sugar; (b) 250 gallons of blackstrap molasses, or (c) 5 pounds of yeast when packaged or cartoned in qauarter pound, half pound, or larger packages; (d) 100 gallons cider; (e) 250 pounds malt; (f) 300 pounds of dehydrated molasses; (g) 250 gallons of hydrol or sugar syurup. When any person has made a return pursuant to the procedure provided for in Article II of these regulations, such books, records, documents, papers, invoices, bills of lading, etc., shall be kept readily available for, and open to, inspection by any officer or employee of the Alcohol Tax United of the Bureau of Internal Revenue during the hours of business of such person."
The defendant, a wholesale dealer in groceries, was charged in an indictment containing two counts with violation of the above quoted Joint Resolution and Regulations. The first count was predicated upon Article II of the Regulations and charged that the defendant having been served with written notice by the Commissioner did wilfully fail and neglect to render to the Commissioner of Internal REvenue a return reflecting the disposition of yeast. The second count was predicated upon Article III of the Regulations and charged that the defendant did wilfully fail to keep at his place of business books, records and documents relating to and connected with the disposition of such yeast. The defendant was convicted upon both counts. The court sentenced him to pay a fine of $500 upon each count and serve a term of imprisonment of one year upon each count, the terms of imprisonment to run concurrently.
Before the jury was sworn the defendant moved to quash the second count of the indictment for failure to charge an offense against the United States on the ground that the article of the Regulations requiring the keeping of books and records was not within the scope of the authority to prescribe regulations conferred by the Joint Resolution upon the Commissioner. The court denied the motion. The defendant does not question the power of Congress to delegate to a selected instrumentality the making of rules for the enforcement of the express legislative intent nor the constitutionality of the Joint Resolution herein involved.*fn1 ...