The opinion of the court was delivered by: BARD
This is an action by plaintiff to recover certain assessed floor taxes and interest paid by the plaintiff under the provisions of the Liquor Taxing Act of 1934, c. 1, Sec. 10(a), 48 Stat. 315, 26 U.S.C.A. § 1151a (1934 edition). The case was tried without a jury.
1. Plaintiff is a Pennsylvania corporation, with its place of business at Philadelphia, Pennsylvania.
2. Defendant, Walter J. Rothensies, a citizen of the State of Pennsylvania, is the Collector of Internal Revenue for the First District of Pennsylvania, maintaining his office at Philadelphia, Pennsylvania.
3. Plaintiff since 1831 has been engaged in the manufacture of mincemeat and plum pudding in which distilled spirits have been used, and prior to the Liquor Taxing Act of 1934 purchased quantities of alcohol and brandy, receiving fifty drums of alcohol on January 6, 1934 several days before the Liquor Taxing Act became effective. Each drum contained fifty-four gallons.
4. Plaintiff prior to January 12, 1934, the effective date of the Liquor Taxing Act of 1934, added thirteen and one-half ounces of powdered cinnamon spice to each fifty-four gallons of alcohol or one-quarter of an ounce of powdered cinnamon spice to each gallon of alcohol and a like amount of cinnamon to each gallon of brandy, the regular formula used by plaintiff in preparing the alcohol and brandy in the manufacture of mincemeat.
5. Within thirty days after the effective date of Title 1 of the Liquor Taxing Act of 1934, plaintiff made and filed a return or report of the alcohol and brandy with cinnamon added and a quantity of wine held by it on that date.
6. In March 1934 an assessment was made and listed by the Commissioner of Internal Revenue against plaintiff in the total sum of $5,862.79. This consisted of $4,617 floor tax on 5,130 proof gallons of alcohol at 90 cents per proof gallon; $68.13 floor tax on 75.7 proof gallons of brandy at 90 cents per proof gallon; $5.10 floor tax on 51 gallons of wine at 10 cents per gallon, and $1,172.56 penalty of 25% for failure to file a return. This assessment was forwarded to the defendant collector and payment was demanded by him on June 19, 1934.
8. Pursuant to demand, on July 9, 1936, plaintiff under protest paid the defendant the sum of $5,258.49, constituting the $4,685.13 floor tax and $573.36 on account of interest, and on August 19, 1936, the further sum of $332.25 balance of interest claimed, amounting in all to $5590.74.
9. On December 9, 1936, plaintiff filed a claim for the refund of the floor taxes and interest paid, which claim was rejected by the Commissioner of Internal Revenue.
10. The alcohol and brandy with cinnamon added was later used by the plaintiff in the manufacture or production of mincemeat, an article intended for sale.
11. The additon of one-fourth of an ounce of cinnamon spice to a gallon had no effect on the potability or beverage ...