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or through an affiliate, distilled spirits or wine so distilled, produced, rectified, blended, or bottled, or warehoused and bottled. (c) Wholesalers. On and after July 1, 1936, no person, except pursuant to a basic permit issued under the Act by the Administrator, shall— (1) Engage in the business of purchasing for resale at wholesale distilled spirits, wine, or malt beverages; or, (2) While so engaged, receive, sell, offer or deliver for sale, contract to sell, or ship in interstate or foreign commerce, directly or indirectly or through an affiliate, distilled spirits, wine, or malt beverages so purchased. (d) State agencies. This section shall not apply to any agency of a State or political subdivision thereof or to any officer or employee of any such agency, and no such agency or officer or employee thereof shall be required to obtain a basic permit under this section.*f (Sec. 3, 49 Stat. 978, as amended by sec. 1, 49 Stat. 1152; 27 U.S.C., Sup., 203) [Art. II, Sec. 1, as amended Feb. 29, 1936] 1.21 Applications for permits. (a) Applications for basic permits to engage in any of the operations set forth in § 1.20 shall be made on the appropriate form prescribed by the Administrator, in triplicate, signed and sworn to, and shall be accompanied by such affidavits, documents, and other supporting data, in triplicate, as the Administrator shall require. All data, written statements, affidavits, documents, or other evidence submitted in support of the application, or upon hearing thereon, shall be deemed to be a part of the application. All applications shall be filed by mailing or delivering the same to the offices of the Federal Alcohol Administration, Washington, D. C. Incomplete or incorrectly executed applications will not be acted upon, but the applicant shall be entitled to file a new application, without prejudice, or to complete the application already filed. In the event of any change in the ownership, management, or control of the applicant (in case of a corporation, any change in he officers, directors, or persons holding more than 10 percent of the corporate stock), after the date of filing of any application for a basic permit and prior to the issuance of such permit, the applicant shall notify the Administrator immediately of such change. (b) In any case in which the application of any person for a basic permit has been denied by any order issued pursuant to § 126, or §§ 1.40–1.44, no new application for a like kind of permit shall be received unless such new application is accompanied by a sworn statement of facts sufficient to satisfy the Administrator that the grounds upon which the former application was denied in whole or in part no longer exist.*f (Sec. 4 (c), 49 Stat. 979; 27 U.S.C., Sup., 204 (c)) [Art. II, sec. 2) 1.22 Issuance of basic permits—(a) By whom issued. Basic permits may be granted, or amended, by the Administrator pursuant to application on such forms and in accordance with such instructions in connection therewith as the Administrator shall prescribe." (b) Persons entitled to basic permits. Any person, who on May 25, 1935, held a basic permit issued by the Federal Alcohol Control Administration, authorizing him to engage in business as a distiller, rectifier, wine producer, or importer, shall be entitled upon application therefor to a basic permit as distiller, rectifier, wine producer, or importer, respectively, conforming to the Act and this part. The application of any other person for a basic permit shall be granted and the permit issued by the Administrator if the applicant proves to the satisfaction of the Administrator that— (1) Such person (or in case of a corporation, any of its officers, directors, or principal stockholders) has not, within 5 years prior to the date of application, been convicted of a felony under Federal or State law, and has not, within 3 years prior to date of application, been convicted of a misdemeanor under any Federal law relating to liquor, including the taxation thereof; (2) Such person, by reason of his business experience, financial standing, and trade connections, is likely to commence operations as a distiller, warehouseman and bottler, rectifier, wine producer, wine blender, importer, or wholesaler, as the case may be, within a reasonable period and to maintain such operations in conformity with Federal law; and (3) The operations proposed to be conducted by such person are not in violation of the law of the State in which they are to be conducted.*f (Sec. 4 (a), (c), 49 Stat. 978; 27 U.S.C., Sup., 204 (a), (c)) [Art. II, sec. 3] 1.23 Recalling permits for correction. Whenever it shall be discovered that any basic permit has been issued authorizing acts, or combinations of acts, which may not properly, under the law and regulations, as now or hereafter in force, be authorized, or that any material mistake has occurred in the issuance thereof, the holder of
* Sec. 4 (c), 49 Stat. 979; 27 U.S.C., Sup., 204 (c), reads, in part, “The Administrator shall prescribe the manner and form of all applications for basic permits (including the facts to be set forth therein) and the form of all basic permits,
*t Eor statutory and source citations, see note to § 1.1. Page 3 and shall specify in any basic permit the authority conferred by the permit and the conditions thereof in accordance with the provisions of this Act”. Pursuant to this authority, the Administrator has prescribed the following forms:
ApplicaOperation authorized tion Instructions Permit form Persons who held F. A. C. A. Permits on FA-1.----| Stapled to No special May 25, 1937. form. form. Distillers---------------------------- FA–2----| FA-2A----- FA–14. Warehousing and bottling------------- FA-3----| FA-3A----- FA–13. FA-3B -- - - FA–3C----Rectifiers---------------------------- FA-4----| FA–4A----- FA–12. Wine producers and blenders- - - - - - - - - - FA–5- - --| FA-5A----- FA–10. Importers--------------------------- FA-6----| FA–6A----- FA–8. Wholesalers------------------------- FA–7- - - -] FA-7A_____ FA–9. Amendment of permit---------------- FA–68---| FA–68A---- N; special Orin.
Copies of these forms may be secured from the Administration upon application.
Page 4 *f For statutory and source citations, see note to § 1.1. *#For statutory and source citations, see note to § 1.1. Page 5
such permit shall forthwith surrender the same for correction or amendment upon demand of the Administration.”f [Art. II, Sec. 4]
1.24 Duration of permits. (a) A basic permit shall continue in effect until suspended, revoked, annulled, voluntarily surrendered, or automatically terminated, as provided in the Act and in this part. (b) No basic permit shall be leased, sold, or otherwise voluntarily transferred, and, in the event of such lease, sale, or other voluntary transfer, the said basic permit shall be automatically terminated thereupon. (c) If any basic permit is transferred by operation of law or if actual or legal control of the permittee is acquired, directly or indirectly, whether by stock ownership or in any other manner, by any person, then such permit shall be automatically terminated at the expiration of 30 days thereafter: Provided, That if within such 30-day period application for a new basic permit is made by the transferee or permittee, respectively, then the outstanding basic permit shall continue in effect until such time as the application is finally acted upon by the Administrator.”f (Sec. 4 (g), 49 Stat. 980; 27 U.S.C., Sup., 204 (g)) [Art. II, sec. 5] 1.25 Changes in ownership, management, or control of business. In the event of any change in the ownership, management, or control of any business operated pursuant to a basic permit (if the permittee is a corporation, if any change occurs in the officers, directors, or persons owning or controlling more than 10 percent of the voting stock of said corporation), the permittee shall immediately notify the Administrator of such change, giving the names and addresses of all new persons participating in the ownership, management, or control of such business, or in the case of a corporation, the names and addresses of such new officers, directors, or persons owning or controlling more than 10 percent of the voting stock. Notice to the Administrator of any such change shall be accompanied or supplemented by such data in reference to the personal or business history of such persons as the Administrator may require.*i [Art. II, sec. 6] 1.26 Denial of permit application. (a) If upon examination of any application for a basic permit the Administrator has reason to believe that the applicant is not entitled to such permit, he shall serve notice upon the applicant, setting forth the grounds upon which the denial of such application is contemplated. The applicant within 15 days after the date of such notice may make application to the Administrator in writing for a hearing. (b) In case no such application for a hearing is filed by the applicant within the time above specified, or within such further time as the Administrator in his discretion may allow, the Administrator will, by order, deny the application, stating the findings which are the basis for his order, and shall furnish a copy of such order to the applicant. (c) In case such an application for a hearing is filed by the applicant within the required time, the Administrator shall set a time and place for hearing and shall serve notice thereof upon the applicant at least 10 days in advance of the hearing date.
(d) If at the date set for hearing (or, if continued, then at the continued date), the applicant does not appear, and if evidence has not been offered to refute or explain the grounds upon which denial of the application is contemplated, a default will be entered and the Administrator shall by order deny the application, stating the findings which are the basis for his order, and shall serve such order upon the applicant. If, at the date set for hearing, the applicant does appear, or if evidence has been offered as stated, the hearing shall be conducted as provided in §§ 1.40–1.44.
(e) After a hearing has been held the Administrator may approve the application, or, by order, deny the application, stating the findings which are the basis for his order, and shall serve such order upon the applicant.*f (Sec. 4 (b), 49 Stat. 979; 27 U.S.C., Sup., 204 (b)) [Art. II, sec. 7]
REVOCATION, SUSPENSION, OR ANNULMENT OF BASIC PERMITS
1.30 Institution of proceedings. (a) Whenever the Administrator has reason to believe that any person has wilfully violated any of the conditions of his basic permit or has not in good faith engaged to a substantial extent in the operations authorized by such permit for a period of more than 2 years, he shall by order institute proceedings for the revocation or suspension of such permit. (b) Whenever the Administrator has reason to believe that any basic permit was procured through fraud or misrepresentation or concealment of material fact, he shall, by order, institute proceedings for the annulment of such permit.*f (Sec. 4 (e), 49 Stat. 979; 27 U.S.C., Sup., 204 (e)) [Art. III, sec. 1] 1.31 Order instituting proceedings. The order of the Administrator instituting proceedings shall specify the grounds upon which the proceedings are based, and a copy of the order shall be served on the permittee. At any time before or during the hearing, the order of the Administrator may be amended, in any particular, but the respondent shall have reasonable opportunity to answer, and prepare a defense to, any new matter covered by any such amendment.”f [Art. III, sec. 2) 1.32 Answer. Within 15 days after such service, or within such further time as the Administrator in his discretion may allow, the respondent may file with the Administrator in writing a request for hearing, together with an answer. The answer shall be so drawn as to advise the Administrator fully of the nature of the defense, and shall admit, deny, or explain in detail each ground specified in the Administrator's order. Grounds not specifically denied or explained shall be deemed admitted. Evidence to be introduced upon such hearing shall be limited to the issues formed by the Administrator's order and the answer filed thereto. The Administrator, or the hearing officer designated by him, may, at any time before or during the hearing, permit amendments to the respondent’s answer upon such terms and conditions as he considers just.*f [Art. III, Sec. 3] 1.33 Time and place of hearing. If request for hearing and answer are received within the required time, the Administrator
Page 6 *#For statutory and source citations, see note to $ 1.1.
shall, by order, designate the time and place of hearing. A copy of such order shall be served upon the respondent at least 10 days in advance of the hearing date. If the respondent appears on the date set for hearing (or, if continued, then at the continued date), or has offered evidence to refute or explain the grounds specified in the Administrator's order, the hearing shall be conducted as provided in §§ 1.40–1.44.”f [Art. III, sec 4
1.34 Default. If no request for a hearing is filed within the required time, or if at the date set for hearing (or, if continued, then at the continued date), the respondent does not appear, and no evidence has been offered as stated, a default will be entered and the Administrator shall by order revoke, suspend, or annul his basic permit as provided in the Act.*f [Art. III, Sec. 5]
1.35. Orders. After a hearing has been held the Administrator shall, by order, stating the findings which are the basis for his order, dismiss the proceedings or revoke, suspend, or annul his basic permit, as provided in the Act, and shall serve such order upon the respondent. If the order is for suspension of any basic permit, it may be conditioned upon such action by the respondent as will thereafter insure conformity with the Act and the regulations thereunder. If the order is for revocation or annulment of any basic permit, it may authorize, in conformity with internal revenue or other laws, the disposition of stocks of distilled spirits, wine, or malt beverages held by the respondent on the effective date of the order, upon such conditions as the Administrator may consider proper.”f (Sec. 4 (e), 49 Stat. 979; 27 U.S.C., Sup., 204 (e)) [Art. III, sec. 6]
CRoss REFERENCE: For Bureau of Internal Revenue regulations relating to the disposition of substances used in the manufacture of distilled spirits, and denatured alcohol, denatured rum, and substances or preparations containing denatured alcohol or denatured rum, see 26 CFR Parts 173, 174.
1.40. Conduct of hearing. (a) Every hearing under this part shall be conducted by the Administrator or by a hearing officer designated by him for the purpose. If the hearing is conducted by the Administrator, the provisions of this part with respect to ho shall apply to the Administrator.
(b) The hearing shall be conducted in such manner as the hearing officer determines will best serve the purpose of attainment of justice and dispatch. . Unless continued by the hearing officer in his discretion, from day to day, or adjourned to a later date, or to a different *. the hearing shall be held at the time and place set forth in the hearing order. The testimony given at any hearing shall be under oath or affirmation administered by the hearing officer and shall be reported verbatim. The reporter shall be sworn by the hearing officer to record correctly by stenography the oral testimony and proceedings at the hearing and transcribe the same to the best of his ability. The hearing officer shall apply at the hearing the rules of evidence applicable in courts of equity of the United States, except that he shall relax such rules whenever in his judgment the
*f For statutory and source citations, see note to § 1.1. Page 7