Tobacco Revenue Regulations

1967 REVENUE REGULATIONS NO. 17-67 SUBJECT : Tobacco Revenue Regulations on Leaf, Scrap, Other Partially Manufactured Tobacco and Other Tobacco Products; Grading, Classification, Inspection, Shipments, Exportation, Importation and the Manufacturers Thereof Under the Provisions of Act No. 2613, as Amended TO : All Internal Revenue Officers and Others Concerned SECTION 1. In accordance with the provisions of Section 70 (B) of the Administrative Code, as amended by Act No. 2803, to supersede all precedents, rulings and regulations heretofore followed on the same subject, the following regulations relative to the enforcement of the provisions of Act No. 2613, as amended, are hereby promulgated. These Regulations shall be known as Tobacco Revenue Regulations on Leaf, Scrap, Other Partially Manufactured Tobacco and Other Tobacco Products; Grading, Classification, Inspection, Shipments, Exportation, Importation and the Manufacturers thereof under the provisions of Act No. 2613, as amended. SECTION 2. Definition of Terms (a) " Bona Fide Tobacco Planter " Includes the following: (1) A person whose stock of Virginia (bright) leaf tobacco or Philippine dark (Native) tobacco is produced by him in a land of which he is the owner or lessee; (2) A "crop-sharing planter" which shall mean a person who, himself and with the aid available from within his immediate farm household, cultivates the land belonging to, or possessed by another, with the latter's consent for purposes of production, sharing the produce with the landholder under the share tenancy system; (3) A "lease-hold planter" which shall mean a person paying to the landowner a price, certain or unascertainable, under the leasehold tenancy system. (b) " Leaf Tobacco Dealer " Includes a person who for himself or for another sells, or offers to sell, delivers, warehouses, barters, or exchanges, or in any other manner disposes in any quantity whatever of leaf tobacco as prescribed in these regulations; Provided :that a planter who disposes of his tobacco within the province where grown, exclusively to a registered wholesale leaf tobacco dealer or to a property authorized buyer for a wholesale leaf tobacco dealer, shall not be regarded as dealer in leaf tobacco; and provided further ,that a tobacco manufacturer shall not be considered as a leaf tobacco dealer when complying with, and operating exclusively under Revenue Regulations No. V-14 and V-30. (c) " Wholesale Leaf Tobacco Dealer " Includes a person who purchases leaf tobacco directly from the tobacco farmers or planters or from other L-3 dealers, warehouses, sells, or offers for sale, delivers, barters, or exchanges for himself or on commission, not less than one standard bale of leaf tobacco at any one time. (d) " Buyer for Wholesale Leaf Tobacco Dealer " Includes a person who, for a registered wholesale leaf tobacco dealer, purchases and receives leaf tobacco from bona-fide planters only; Provided ,that he purchases tobacco only in the territory authorized by his principal, and only for his principal, either as bona-fide employee of the said principal or on commission basis. (e) " Retail Leaf Tobacco Dealer " Includes a person who pays a privilege tax receipt [B-14(a)] and who for himself or on commission sells leaf tobacco or offers the same for sale to any one person except to a registered dealer of leaf tobacco or to a manufacturer of cigars, cigarettes, or other manufactured tobacco products as provided for in Chapter VII, Section 26 hereof. (f) " Retail Planter Dealer " A bona-fide tobacco planter who disposes of any part of all of the crops actually produced by him to consumers only to quantities not exceeding one (1) kilo to any one person during one month and only for the consumption of the purchaser. (g) " Wholesale Tobacco Dealer " Includes a person who for himself or on commission sells or offers for sale cigars, cigarettes or manufactured tobacco in quantities of not less than two hundred (200) cigars, eight hundred (800) cigarettes or five kilos of manufactured tobacco at any one time or who sells or offers the same for the purpose of resale, regardless of quantity. (h) " Retail Tobacco Dealer " Comprehends every person who for himself, or on commission, sells or offers for sale, not more than two hundred (200) cigars, not more than eight hundred (800) cigarettes, or not more than five (5) kilos of manufactured tobacco at any one time and not for resale. (i) " Manufacturer of Tobacco " Includes every person whose business it is to manufacture tobacco of snuff or who employs others to manufacture tobacco or snuff, whether such manufacture be by cutting, pressing (not baling),grinding, or rubbing (grating) any raw or leaf tobacco, or otherwise preparing raw or leaf tobacco, or manufactured or partially manufactured tobacco and snuff, or putting up for consumption scraps, refuse, or stems or tobacco resulting from any process of handling tobacco stems, scraps, clippings, or waste or sifting, twisting, screening or by any other process. (j) " Manufacturer of Cigars and/or Cigarettes " Includes those persons whose business is to make or manufacture cigars and/or cigarettes for sale, or who employ others to make or manufacture cigars and/or cigarettes for sale; but the term does not include artisans or apprentices employed to make cigars and/or cigarettes from material supplied by the employer, the latter being lawfully engaged in the manufacture of cigars and/or cigarettes. (k) " Persons " Includes natural and juridical persons unless the context of the provision in these regulations provides otherwise. (l) " Leaf Tobacco " Whole leaf or leaf in its complete form. (m) " Partially Manufactured Tobacco " Includes: (1) " Stemmed Leaf " handstripped tobacco, clean, good, partially broken leaf only, free from mold and dust. (2) " Long-Filler " handstripped tobacco of good, long pieces of broken leaf usable as filler for cigars without further preparation, and free from mold, dust stems and cigar cuttings. (3) " Short-Filler " handstripped or machine-stripped tobacco, clean, good, short pieces of broken leaf, which will not pass through a screen of two inches (2") mesh. (4) " Cigar-Cuttings " clean cuttings or clippings from cigars, unsized with any other form of tobacco. (5) " Machine-Scrap Tobacco " machine-threshed, clean, good tobacco, not included in any of the above terms, usable in the manufacture of tobacco products. (6) " Stems " midribs of leaf tobacco removed from the whole leaf or broken leaf either by hand or machine. (7) " Waste Tobacco " denatured tobacco; powder or dust, refuse, unfit for human consumption; discarded materials in the manufacture of tobacco products, which may include stems. (n) " Manufactured Products of Tobacco " Includes cigars, cigarettes, smoking tobacco, chewing tobacco, snuff, and all other forms of manufactured tobacco. (1) " Cigars " any rolls or bunches of tobacco, wholly made of natural and/or reconstituted tobacco. (2) " Cigarettes " any rolls of tobacco or any substitute thereof, wrapped in paper or any substance other than tobacco. (3) " Chewing Tobacco " (Mascada) all rolls of "Batek" or other heavy type of tobacco (Mascada) or treated coke of pressed, flattened tobacco intended for chewing only. (4) " Smoking Tobacco " any fine or rough-cut tobacco not rolled or wrapped, and ready for smoking. (5) " Snuff Tobacco " any specially prepared powdered tobacco intended to be inhaled. cd (o) " Other Authorized Internal Revenue Officer " Means a internal revenue officer duly provided with a written authority issued by the Commissioner of Internal Revenue, directing him to perform the duties of a tobacco inspector in the absence or unavailability of the latter. CHAPTER I Administrative Designation, Schedules, Paragraph and Assessment Number SECTION 3. (a) L-3 Wholesale leaf tobacco dealer. (b) L-3F Wholesale leaf tobacco dealer. Issued only in favor of Farmer's Cooperative Marketing Association (FaCoMas) duly organized in accordance with law. [This function relative to tobacco trading was transferred to the Philippine Virginia Tobacco Administration (PVTA) under Section 15 of Republic Act No. 2265]. (c) L-3R Wholesale leaf tobacco dealers. Issued only in favor of persons or entities having fully equipped Redrying Plants. (d) L-3 Buyers for wholesale leaf tobacco dealers. (e) L-4 Wholesale leaf tobacco dealers. Issued only in favor of persons or entities having flue-curing barns, who may purchase or receive gree Virginia leaf tobacco from bona fide tobacco planters only, or handle green leaf of their own production, which tobacco shall be sold or transferred only to holders of L-3 and L-3R permits after flue-curing the tobacco. (f) L-5 Tobacco planters selling to consumers part or the whole of their tobacco production. (g) L-6 Wholesale leaf tobacco dealers who, exclusively for export, except as otherwise provided for in these regulations, perform the following functions: (1) Handstripped and/or thresh whole leaf tobacco for themselves or for other L-6 or L-7 permittees; (2) Re-process partially manufactured tobacco for themselves, or for other L-6 or L-7 permittees; (3) Sell their partially manufactured tobacco to other L-6 permittees. (h) L-7 Manufacturers of tobacco products. [L-7 designates an auxiliary registered book (bale books),for manufacturers of tobacco products.] (i) B-14 Wholesale leaf tobacco dealers (Privilege tax receipt) (j) B-14 (a) Retail leaf tobacco dealers (Privilege tax receipt) SECTION 4. Who May Handle Tobacco ? No person may handle tobacco except: (1) Bona fide tobacco planters selling tobacco of their own production to holders of L-3, L-3 , L-3R, L-3F, L-4, L-5, L-6 and/or L-7 permits. (2) Persons who are allowed by virtue of these regulations to sell or transfer leaf tobacco and are provided with the necessary forms and have complied with all requirements of these regulations. CHAPTER II Standard Classification of Tobacco SECTION 5. Philippine tobacco shall be classified as follows: A. Dark (Native) Leaf Tobacco Native leaf tobacco shall be classified into seven grades, viz: First (1a),Second (2a),Third (3a),Fourth (4a),Fifth (5a),Sixth (6a) and Seventh (PP).The grade of the tobacco except the Sixth (6a) and Seventh (PP) grades shall be primarily determined by the origin, length, texture and soundness of the leaf. (a) As to Origin The term "Isabela" applies to tobacco grown in the province of Isabela; "Visayan tobacco" to tobacco grown in all or any province of the Visayas; and "Mindanao tobacco" to tobacco grown in all or any province of Mindanao. Tobacco grown in other provinces shall be designated by the name of the province of its origin or production. (b) As to Length (Measurement in to be made from the base of the petiole to the tip of the leaf). First Grade Not less than 45 centimeters. Second Grade Not less than 40 centimeters. Third Grade Not less than 30 centimeters. Fourth Grade Superior 40 centimeters and above. Fifth Grade Less than 25 centimeters. Sixth Grade Unspecified length. Seventh Grade (PP) Less than 10 centimeters. For every grade, a tolerance of 2 centimeters below the minimum lengths specified above will be allowed. (c) As to Soundness After determining the grade of the tobacco with references to its origin and length, it will be judged according to its soundness, as follows: FIRST GRADE (1a) Fine (1aF) Tobacco of good quality, fine to medium texture, with not more than five per cent (5%) broken or worm eaten leaf. Course (1aC) Tobacco coarser in texture than the above, with not more than five per cent (5%) broken or worm eaten leaf. SECOND GRADE (2a) Fine (2aF) Tobacco of good quality, fine to medium texture, with not more than eight per cent (8%) broken or worm eaten leaf. Course (2aC) Tobacco coarser in texture than the above, with not more than eight per cent (8%) broken or worm eaten leaf. THIRD GRADE (3a) Fine (3aF) Tobacco of good quality, fine to medium texture, with not more than ten per cent (10%) broken or worm eaten leaf. Course (3aC) Tobacco coarser in texture than the above, with not more than ten per cent (10%) broken or eaten leaf. FOURTH GRADE SUPERIOR (4aF) Fine (4aSF) Tobacco of good quality, fine to medium texture with not more than forty per cent (40%) broken or worm eaten leaf. Course (4aSC) Tobacco coarser in texture than the above, with not more than forty per cent (40%) broken or worm eaten leaf. FOURTH GRADE (4a) Fine (4aF) Tobacco of good quality, fine to medium texture, with not less than twenty per cent (20%) whole leaf. Coarse (4aS) Tobacco of good texture and quality, coarser and heavier than Fourth (4a)-F, tobacco with not less than twenty per cent (20%0 whole leaf. Current (4a) Tobacco of poorer texture and quality, with not less than twenty per cent (20%) whole leaf. FIFTH GRADE (5a) Retoo (5aRF) Fine Tobacco consisting of the last sprouts of the plant and measuring not more than 25 centimeters, of good texture and fair quality. Retoo (5aRC) Coarse Tobacco with the same description as Retoo fine but poorer in texture and quality. Fine (5aF) Tobacco measuring less than 20 centimeters in length and of good texture and quality. SIXTH GRADE (6a) All tobacco not specified under any of the above grades, including tobacco of any length. It is tobacco of generally poor quality, may be somewhat moldy, over-fermented, dusty; but still fit for human consumption. SEVENTH GRADE (PP) This grade is called "Particula" or sweepings and comprises unclean parts and bits of leaf tobacco and its stems, broken off during the handling process in warehouses. (d) Standard for Export All grades of tobacco. However, the Sixth and Seventh Grades, when packed or baled for export, must be marked on the bales as "Low-Grade" tobacco. Tobacco for export may be graded, packed and/or baled and marked in accordance with specifications of foreign buyers even if the same differ from the grades prescribed in these regulations, provided ,that prior to shipment, the Tobacco Inspection Service shall have already been requested to inspect the tobacco so packed, and the inspection done within three (3) days from date of written notification. Provided , further ,that the same privilege shall apply to manufactures of cigars and/or cigarillos who buy, grade and pack the tobacco for exclusive use in their own factory. (e) Abbreviations For purpose of marking bales or containers of leaf tobacco, the following abbreviations shall be used: 1aF First Grade Fine 1aC First Grade Coarse 2aF Second Grade Fine 2aC Second Grade Coarse 3aF Third Grade Fine 3aC Third Grade Coarse 4aSF Fourth Grade Fine 4aSC Fourth Grade Superior Coarse 4aF Fourth Grade Fine 4aC Fourth Grade Coarse 4a Fourth Grade Current 5aRF Fifth Grade Retoo Fine 5aRC Fifth Grade Retoo Coarse 5aF Fifth Grade Fine 6a Sixth Grade pp Seventh Grade (f) Classification and Grading Before Removal . Leaf Tobacco before being removed from the province of origin, must first be classified and graded in accordance with these regulations. Provided, however, that the classification and grading herein required to be made shall not be understood as prohibiting the grower to sell leaf tobacco in sticks (palillos) or by lot once such tobacco has been duly classified and graded. However, efforts should be made to discourage the farmers selling their crops in palillos or sticks. B. Philippine-Grown Wrapper Tobacco The term "wrapper tobacco" shall apply to shade-grown tobacco or open-grown tobacco which has the features of shade-grown wrapper tobacco, and this product will principally be used as outer cover for cigars and/or cigarillos. Wrapper tobacco shall be classified as follows: (a) As to Origin The terms "La Union","Ilocos","Isabela","Visayas" and "Mindanao" shall apply to wrapper tobacco shade and/or open-grown in the aforementioned provinces or regions; in the same way wrapper tobacco shade and/or open grown in other provinces shall be designated by the name of the provinces or region of origin. (b) As to Soundness and Texture For purpose of determining the classification of Philippine shade and/or open grown wrapper tobacco, the primary consideration shall be the soundness and texture of the leaf. Within each group of origin, there shall be six grades of wrapper tobacco, viz: A, B, C, D, E and F. GRADE (A) Tobacco of very fine and silky texture and not more than three per cent (3%) broken and/or worm eaten leaf. The leaf shall be elastic and reasonably free from green and/or black spots, speckles or other blemishes. GRADE (B) Tobacco of medium-fine to medium-coarse texture, and not more than eight per cent (8%) broken and/or worm eaten leaf. The leaf shall be elastic and reasonably free from green and/or black spots, speckles or other blemishes. GRADE (C) Tobacco of fine texture and not more than eight per cent (8%) broken and/or worm eaten leaf. The leaf shall be reasonably elastic, but may show green and/or black spots, speckles or other blemishes. GRADE (D) Tobacco of medium-fine to medium-coarse texture and not more than eight per cent (8%) broken and/or worm eaten leaf. The leaf shall be reasonably elastic, but may show green and/or black spots, speckles or other blemishes. GRADE (E) Tobacco of fine to medium-fine texture and not more than fifty per cent (50%) broken and/or worm eaten leaf. The leaf shall be reasonably elastic, but may show green and/or black spots, speckles or other blemishes. Wrapper tobacco which is coarse and/or more than fifty per cent (50%) broken and/or worm eaten leaf shall be classified and considered as filler tobacco. (c) As to Length of Leaf Each of the above enumerated six grades shall be sub-graded into three different lengths, viz: 1, 2 and 3. Length 1 Not less than 45 centimeters. Length 2 Not less than 35 centimeters. Length 3 Not less than 25 centimeters. Wrapper tobacco less than 25 centimeters in length shall be classified as filler tobacco. (d) As to Color All shade-grown wrapper tobacco shall be considered as "claro" and all open-grown wrapper as "colorado". (e) Standard for Export all grades of shares and/or open grown wrapper tobacco, provided that the bales or containers thereof shall be marked accordingly. Wrapper tobacco for export may be graded, packed and/or baled in accordance with specifications of foreign buyers even if the same differ from the grades prescribed in these regulations, provided ,that prior to shipment, the Tobacco Inspection Service shall have already been requested to inspect the tobacco so packed, and the inspection done within three (3) days from date of written notification. Provided further ,that the same privilege shall apply to manufacturers of cigars who buy, grade and pack the tobacco for exclusive use in their own factory. (f) Abbreviations For the purpose of marking bales or containers of wrapper tobacco, the following abbreviations shall be used: A1 Wrapper tobacco classified as Grade A and not less than 45 centimeters in length. A2 Wrapper tobacco classified as Grade A and not less than 35 centimeters in length. A3 Wrapper tobacco classified as Grade A and not less than 25 centimeters in length. B1 Wrapper tobacco classified as Grade B and not less than 45 centimeters in length. B2 Wrapper tobacco classified as Grade B and not less than 35 centimeters in length. B3 Wrapper tobacco classified as Grade B and not less than 25 centimeters in length. C1 Wrapper tobacco classified as Grade C and not less than 45 centimeters in length. C2 Wrapper tobacco classified as Grade C and not less than 35 centimeters in length. C3 Wrapper tobacco classified as Grade C and not less than 25 centimeters in length. D1 Wrapper tobacco classified as Grade D and not less than 45 centimeters in length. D2 Wrapper tobacco classified as Grade D and not less than 35 centimeters in length. D3 Wrapper tobacco classified as Grade D and not less than 25 centimeters in length. E1 Wrapper tobacco classified as Grade E and not less than 45 centimeters in length. E2 Wrapper tobacco classified as Grade E and not less than 35 centimeters in length. E3 Wrapper tobacco classified as Grade E and not less than 25 centimeters in length. F1 Wrapper tobacco classified as Grade F and not less than 45 centimeters in length. F2 Wrapper tobacco classified as Grade F and not less than 35 centimeters in length. F3 Wrapper tobacco classified as Grade F and not less than 25 centimeters in length. (g) Classification and Grading Before Removal . Wrapper tobacco before being removed from the province of origin, must first be classified and graded in accordance with these regulations. Provided, however, that the classification and grading herein required to be made shall not be understood as prohibiting the grower to sell wrapper tobacco in sticks (palillos) or by lot once such tobacco has been duly classified and graded. However, efforts should be made to discourage the farmers from selling their crops in palillos or sticks. cdll C. Philippine Virginia (Bright) Tobacco The Philippine Virginia flue-cured tobacco shall be classified as follows, in accordance with Republic Act No. 698, as amended by Republic Act No. 1194: For flue-cured Virginia leaf tobacco: For sun-dried Virginia leaf tobacco: Grade A Bright yellow leaf SDA Light brown leaf tobacco B Dull yellow leaf SDB Brown leaf tobacco C Spotted yellow leaf SDC Dark brown and other kinds D Greenish and brownish leaf E Dark and other kinds Grades Description A1a Good to choice quality leaf in deep lemon or bright yellow color, clean, rich in oil, thin or fine in body, normal width to broad, strong, ripe, over 20" long and damages and/or injury not exceeding 5 per cent. A1b Good to choice quality leaf in deep lemon or bright yellow color with the same elements as Ala grade, except that it is medium in body. B1a Good to choice quality leaf in deep lemon or bright yellow color with the same elements as Ala grade, but over 18" long, with injuries and/or damages not exceeding 5 per cent. B1b Good to choice quality leaf of deep lemon or bright yellow color with the same elements as of Ala grade, medium body, over 20" long with injuries and/or damages of over 5 per cent, but not exceeding 10 per cent. B2a Good to choice quality leaf of orange color, with the same elements as Ala grade, but medium in body, over 17" long, with injury and/or damage not exceeding 5 per cent. C1a Fair to fine quality leaf in deep lemon or bright yellow color, clean, rich in oil, fine in body, normal width to broad strong, ripe, over 16" long with injury and/or damage not exceeding 3 per cent. C1b Fair to fine quality leaf in deep lemon or bright yellow color and with the elements of C1a grade, except that it is medium in body, with injury and/or damage not exceeding 5 per cent. C2a Fair to fine quality leaf in orange color, with all the elements of Cla grade with injury not exceeding 5 per cent. C2b Fair to fine quality leaf in orange color, with all the elements of C2a grade, but medium in body with injury and/or damage not exceeding 3 per cent. C2c Good to choice quality leaf of mixed lemon and orange colors, medium to fine in body, normal width to broad, strong, ripe, over 14" long with injury over 5 per cent but not exceeding 10 per cent. B3a Fair to good quality leaf in lemon and/or orange color, clean, rich in oil, fine body, normal width, ripe over 13" long with injury and/or damage not exceeding 5 per cent. D3b Same element of quality as D3a grade, but medium in body, with injury and/or damage not exceeding 3 per cent. D3c Fair to good quality leaf in lemon and/or orange color, medium and/or fine body, clean, rich in oil, ripe, over 15" long and injury or damage not lower than 5 per cent but not exceeding 10 per cent. D4c Fair to good quality leaf with dominating lemon and/or orange color with a slight shade of green and/or brown color, clean, rich in oil, medium and/or fine in body, ripe over 12" long with injury and/or damage not exceeding 5 per cent. E4a Fair to good quality leaf in dominating lemon and/or orange color with a brownish shade, fine in body, clean, normal width, rich in oil, ripe over 10" long, with injuries and/or damages not exceeding 5 per cent. E4b Same elements as E4a grade, except that the body is medium. E4c Any of D grades with length shorter but not less than 8" long with injuries and/or damages not exceeding 10 per cent. Supplementary guide to grading : 1. Bundling leaves of mixed grades not allowed. 2. Injured leaves of the same grades should be bundled together and separated from the uninjured leaves. 3. Injured leaves of the same grade should be packed together if they constitute sufficient quantity otherwise, packed and bundled uninjured leaves within permitted tolerance. 4. Packing of mixed grades is not allowed, but should there be an admixture of grades, the grade of the tobacco in a pack should be of the lowest grade of tobacco found in the pack. 5. No allowance is provided for reject tobacco mentioned in PVTA Circular No. 3, dated May 4, 1966. 6. Length is based from tip to tip of the tobacco leaf. Legend : (Grade Identification) 1. Capital alphabet letters represent the grade of the flue-cured tobacco. 2. Numerical figures represent the color element of the tobacco leaf: 1-lemon; 2-orange; 3-mixed lemon and orange; 4-variegated. 3. Small alphabet letters represent other quality elements of the flue-cured tobacco within the same grade-grouping. D. Partially Manufactured Tobacco Partially manufactured tobacco products shall be classified as follows: (a) As to Origin The terms "Isabela, "Pangasinan","Cagayan","Visayas" and "Mindanao" apply to tobacco produced in the aforementioned provinces or regions in the same way that tobacco produced in other provinces shall be designated by the name of the province or region of origin. (b) As to Quality For purposes of determining the classification of partially manufactured tobacco, the primary consideration shall be the texture, aroma and burn. (c) As to Size and Utility (1) Handstripped and machine-threshed scrap tobacco . (aa) HANDSTRIPPED SCRAP A Scrap Stemmed-leaf, whole leaf with midrib removed, suitable as binder, wrapper, etc. B Scrap Long-filler, the bulk of which is above four inches (4"). C Scrap Short-filler, the bulk of which is below four inches (4"). D Scrap Small scrap, the bulk of which is from one-eight of an inch (1/8") to two inches (2"). (bb) MACHINE THRESHED SCRAP A Machine-Scrap Large-scrap, the bulk of which is two inches (2") or above. B Machine-Scrap Small-scrap, the bulk of which is one inch (1") to two inches (2"). C Machine-Scrap Fine-scrap, the bulk of which is below one (1) to one-eight (1/8) an inch. (2) Siftings (" menudillo ") Very fine scrap tobacco, the bulk of which is from one-eighth (1/8) to one-sixteenth (1/16) of an inch. (3) Particula Comprises unclean parts and bits of leaf tobacco and its stems, broken off during the handling process. (4) Tobacco Powder Tobacco below one-sixteenth of an inch (1/16"). (5) Stems Only when stems are usually used in the manufacture of finished tobacco products (cigars, cigarettes, snuff, etc.) or exported shall they be classified as partially manufactured tobacco; otherwise they shall be considered waste. (6) Waste Tobacco Denatured tobacco powder or dust, refuse, unfit for human consumption; and discarded materials in the manufacture of tobacco products, which may include stem. It can be only for agricultural and/or industrial purposes. (d) Standard for Export of Partially Manufactured Tobacco . Stemmed leaf, long-filler, short-filler, cigar cuttings, stems and such other scrap as may be classified as standard for export, provided that the tobacco used is clean, neither moldy nor musty, and is prepared from good quality tobacco. CHAPTER III Packing, Wrapping, Rebaling, Marking, Storage, and Shipment of Leaf, Scrap and Other Partially Manufactured Tobacco SECTION 6. Sanitary Rules Respecting Classification and Grading, Baling and/or any Kind of Packing of Tobacco . (a) All operations performed in the baling or packing establishments of wholesale of leaf tobacco dealers, exporters, large plantation owners and auction floors, shall be made either in a drying shed or curing house constructed in accordance with specifications prescribed by the Native Tobacco Classification Council only. Under no circumstances shall any dwelling house of living quarters be used for the purpose. All manual operations pertaining to the classification and grading, baling and/or any kind of packing of leaves shall be carried on in a sanitary manner upon dry, clean tables, or upon dry, clean mats and spread upon floors, benches or baskets and boxes in such a way that neither the surface in which the tobacco is handled nor the tobacco itself, will be stepped upon by human beings or animals. Provided, however, that should it be necessary to step on the tobacco leaves, the workers or laborers shall first wash their feet with clean water supplied by the company or owner of the warehouse. (b) Insanitary Acts . No person engaged in the classification and grading, baling and/or any kind of packing of leaf tobacco shall perform, cause, permit, or suffer to be permitted, any in insanitary act during such employment, nor shall any person during such employment, touch or contaminate any tobacco with his feet or with filthy hands, or use impure water or other unwholesome substance as a moistening agent, or example, walk, or stand upon any tobacco or permit or suffer the same to be done; nor shall any person suffering from any communicable diseases handle, touch, or manipulate leaf tobacco. The owner, manager or warehouseman of establishments where classification and grading, baling and/or any kind of packing of leaf tobacco is done, shall require from each laborer or worker a medical certificate of good health, from a duly licensed physician before such laborer or worker is employed. SECTION 7. Preparation of the Hand and Bunch . Whether tobacco be packed in bales, casks, or cases, it must first be arranged into bunches (pinongos) or hands (manos) as prescribed below: (1) Pinongo The leaves are taken from the sticks (palillo) on which stuck for drying, and classified in uniform size, soundness, color and texture, and gathered into bunches (pinongos) of approximately twenty leaves to the bunch and tied together with twine or fiber, or tobacco leaf at the stems. If the packer so desires, he may, before baling, further gather five pinongos together and tie them at the stem, in the middle, and at the tips, forming what is known as a "carrot". (2) Old-Style Hand The leaves are taken from the sticks on which stuck for drying and classified in uniform size, soundness, color and texture. cdi The leaves are then folded along the midribs so that the under side (dorsal aspect) of the leaves face out, and ten leaves, more or less of the same classification, gathered into small bunches, (manojitos),ten of these bunches are tied together into a hand in such a manner so as to leave the midribs exposed. Each hand is tied at each end and in the middle with twine, fiber or a tobacco leaf. SECTION 8. Packing and Wrapping . (a) Leaf , scrap or other partially manufactured tobacco shall be packed or baled only in standard packages before removal or shipment . Before selling or transferring leaf tobacco or partially manufactured tobacco, Native or Virginia, to a tobacco factory or to another wholesale leaf tobacco dealer or retailer, outside the province of origin, the same must be classified, graded, and packed in standard packages and properly marked in accordance with those regulations. Prior to packing, leaf tobacco shall be bundled either "manos" or "pinongos". Standard packages shall consist of bales each containing 25, 50, 55, 100, 115, or 125 kilos net weight of tobacco of cases each containing 100, 120, 150 or 200 kilos net/and of hogsheads each containing not less than 350 kilos net, of leaf or partially manufactured tobacco. Tobacco for export may be packed or baled in quantities other than those herein specified. In no case shall unpacked tobacco of wholesale leaf tobacco dealers be transferred or transported from one province to another except when authorized in writing by the Commissioner of Internal Revenue. Loose leaf tobacco, however, may be transferred without special permit within the same province from one warehouse to another belonging to the same owner, provided the transfer is duly recorded in the L-3, 3- and/or L-6 record books. (b) Exemptions from Packing Requirements . The provisions relative to packing in accordance with these regulations shall not apply to (1) tobacco planters delivering leaf tobacco of their own production to registered wholesale leaf tobacco dealers within the municipality or province in which the tobacco was produced, (2) transfer of leaf tobacco from the planters to the warehouses sub-buyers, and (3) transfer of leaf tobacco from the warehouse of sub-buying stations to the main warehouse of the principal in the same province. (c) Loose Leaf Packing . Wholesale leaf tobacco dealers whose business is in the province and who purchase native loose leaf tobacco directly from the tobacco planters for export with the intention to pack the same in loose leaf form may be allowed to do so, provided that the said Native or Virginia leaf tobacco is first properly cured, fermented, classified and graded to meet the standard requirements for export pursuant to Section 7 of Act No. 2613, as amended. (d) Transfer of Loose-Leaf from L-3 to L-6 . Any wholesale leaf tobacco dealer having both L-3 and L-6 permits who desires to strip or stem tobacco leaf either by hand or machine under the L-6 permit from L-3 tobacco stocks, need not pack or bale the same before transferring the loose leaf tobacco to the L-6 stock for stripping purposes; before transferring such leaf tobacco, however, an application for inspection must first be filed and the inspection fee on the leaf under the L-3 paid only after weighing same under the supervision of a duly authorized representative of the Commissioner of Internal Revenue. (e) Wrapping Materials . When tobacco is baled or packed in bales, the wrapping materials must be burlap or matting (petate) made from "saja",buri, coconut leaf, jute, strong double flexible thick cardboard, or other wrapping materials sufficiently protecting the tobacco. The materials must have a surface sufficiently smooth to be marked permanently and legibly. The wrapping should completely cover the tobacco and be securely bound with wire, bejuco, abaca rope, steel strap, or a substitute equally suitable as a binder. No light type of paper should be used as sole wrapper of leaf or partially manufactured tobacco either for local sale or for export. Bales for export shall be wrapped in "Saguran" or jute or other suitable cloth. The use of inside lining is optional. (f) Rebaling . Tobacco purchased from other wholesale leaf tobacco dealers (L-3, L-3F, L-3R or L-6) either from the provinces or Manila and suburbs, and re-opened for reclassification, regraded and repacked for export, shall be inspected and the corresponding inspection fees thereon shall be paid within five (5) days before the date of shipment abroad of said tobacco. Wholesale leaf tobacco dealers who may re-open standard bales of leaf or partially manufactured tobacco, the inspection fee on which has already been paid at the point of origin or shipment, to be reclassified and repacked in the same or another standard packing for local sale, should apply for re-inspection under these regulations and pay the corresponding re-inspection fee before removal, except when the rebaling of the said baled tobacco is necessary because the packing materials thereof where destroyed through force majeure . Lower quality leaf tobacco and/or partially manufactured tobacco under an L-6 permittee establishment found unfit for export and repacked for local disposal shall, before removal from the establishment, be inspected, and the corresponding inspection fee paid. However, if leaf tobacco transferred for stripping or threshing is found to be of lower quality and unfit for export and is therefore repacked and returned to the consigner or owner thereof, the inspection fee for said repacking need not be paid; said transfer, however, shall be accompanied by a guia and certified as unfit for export by the Commissioner of Internal Revenue or his duly authorized representative from the Tobacco Inspection Service. In cases when leaf tobacco which has previously been bundled, graded, classified, inspected and packed in standard packages, has to be repacked for export in loose leaf form without raffia ties, the change is allowable provided written permission from the Commissioner of Internal Revenue is obtained and the new packing is properly verified by a BIR tobacco inspector or other authorized internal revenue officer. SECTION 9. Manner and Time of Marking Bales , Casks or Hogshead . (a) Marking After packing, baling or rebaling of leaf or partially manufactured tobacco in standard packages in a warehouse, sub-warehouse or approved buying stations, where a register and official guia or subsidiary record books for a wholesale leaf tobacco dealer (BIR Form No. 31.46 and 31.48) are required to be kept as prescribed under Section 11 (a) hereof, every bale, case, cask or hogshead shall be marked permanently and legibly with stencil of letters and figures which shall not be less than five (5) centimeters in height indicating the year of harvest, class and type of the tobacco, its net weight in kilos at the time presented for inspection, municipality and province where the tobacco was grown; schedule, paragraph, assessment number of the dealer. In case of hogshead, casks, or the like, the same shall be marked immediately after packing and weighing in the Redrying Plant. In addition to the markings herein specified the words "Product of the Philippines",shall be permanently and legally marked on every bale, case or hogshead prepared for export. Additional private marks may be placed, provided same are not false or misleading. The bales shall be marked in the following manner: SAMPLE Marks on the bales (Native tobacco) 1. Schedule, paragraph and assessment number (L-3-6800) 2. Crop year (1966) 3. Class or grade (1a) 4. Net weight (115 kilos) 5. Municipality (Batac) 6. Province (Ilocos Norte) 7. Product of the Philippines (to be marked if for export) For the packing of Virginia leaf tobacco, the L-3R or L-3F permittees shall use cases, casks, hogsheads or similarly approved containers made of wood having a smooth without erasures. When using previously marked containers, the unused surface of the wood should be placed facing the outside. Other marks such as ordinary commercial or shipping marks shall also be placed in such a manner as not to render misleading or confusing the markings herein required. Any contemplated change or alteration in the marks that were printed on the bales, cases, casks or hogsheads or similarly approved containers immediately after packing, shall be brought to the attention of the Commissioner of Internal Revenue or his duly authorized representative from the Tobacco Inspection Service before the desired alteration or change is effected. In the case of Virginia flue-cured tobacco, inspection labels made of strong cardboard of three (3) segments or portions identically marked shall be attached to every bale of the lost inspected. Said labels or tags used for Virginia leaf tobacco bales shall measure four (4) inches in width and nine (9) inches in length identical printing on each of the three (3) segments of the tag as illustrated below: SAMPLE Marks printed on one segment of the tag attached to the bales . (Virginia flue-cured and sun-dried) TOBACCO INSPECTOR TAG VIRGINIA TOBACCO ______________ _______________ (19__) Municipality Province NO. OF BALES _____________ TOTAL WEIGHT_____________ PACKER'S GRADE __________ DATE INSPECTED ___________ OFFICIAL GRADE ____________________ SIGNATURE OF MANAGER ____________ TOBACCO INSPECTOR ______________ In the Redrying Plant, after packing the redried Virginia leaf tobacco, the container shall be marked on the cover of the circular end of the hogshead as follows: SAMPLE Marks on the hogshead (Virginia tobacco) 1. Philippine Virginia tobacco 2. Year of Harvest 3. The official grade 4. The schedule, paragraph and assessment number of the Redrying Plant. 5. Serial Number of the hogshead 6. Weight of the container 7. Net weight of the tobacco 8. Gross weight of the packed Virginia hogshead 9. Date packed 10. Name of the owner 11. Product of the Philippines SECTION 10. Storage and Shipment or Transfer of Leaf and Partially Manufactured Tobacco . (a) Leaf or partially manufactured tobacco shall be kept only in such warehouses as previously approved in writing for the purpose by the Commissioner of Internal Revenue and covered by the official register and guia books for a wholesale leaf tobacco dealers (BIR Form No. 31.46 and 31.48),retail leaf tobacco dealer [B-14(a) tax receipt] and L-6 permit holders. In addition to the main tobacco warehouses, all sub-warehouses of a registered wholesale leaf tobacco dealer shall be approved by the Commissioner of Internal Revenue before they are used for storage. The stocks of tobacco of wholesale leaf tobacco dealers and retail leaf tobacco dealers. [B-14(a)] shall not be kept together in the same tobacco warehouse. However, wholesale leaf tobacco dealers (holders of L-3) who are at the same time L-7 and/or L-6 permittees may be allowed to have one warehouse for storage of their stocks of leaf tobacco, provided that necessary partitions are built to completely separate each from the other. (b) Shipment , Transfer of Tobacco and Use of Official Guias . All shipments and transfers of tobacco by wholesale leaf tobacco dealers to other L-3, L-3R, L-3F, L-6, L-7 and/or L-7- permit holders shall be made in standard packages, inspected and the corresponding inspection fees paid at the point of shipment. All shipments shall be accompanied by an official guia until received by the consignee. The guia shall never be separated from the tobacco being shipped; otherwise, the shipment shall be subject to confiscation by BIR tobacco inspectors or other authorized representative of the Commissioner of Internal Revenue. Transfer of tobacco of wholesale leaf tobacco dealers to the main warehouse from their tobacco sub-warehouses having an independent assessment number with subsidiary official guia and register books, shall be covered by official guias during the transfer of the tobacco, even if such transfer occurs within the same town, city or province. If, however, wholesale leaf tobacco dealers have sub-warehouses within a town, city or province without independent assessment numbers, they need not use guias during the transfer of tobacco from such sub-warehouses to the main warehouse. L-3 Wholesale leaf tobacco dealers, who at the same time are holders of L-6 and/or L-7 permits, and wish to transfer leaf tobacco for threshing purposes from their L-3 to L-7 and/or L-6 official register books, but subsequently find said tobacco to be unfit for export, can return the same to their L-3 official book only with official guia but without the requirement of inspection and payment of inspection fee. If, however, the leaf tobacco is intended for sale or transfer to another L-3, L-6 or L-7 permit holder, the tobacco shall first be inspected and the corresponding tobacco inspection fee thereafter, paid. In cases where an L-3 permittee maintains another warehouse adjacent to his main compound, the distance between the two warehouses being such that the transfer is within sight of, or capable of being managed or supervised by, the management at the main compound, no official guia is necessary for such transfer or removal. SECTION 11. Only Wholesale Leaf Tobacco Dealers May Ship Tobacco Out of Any Province . Except as provided in Sections 15 and 16 of these regulations only L-3, L-5, L-6, L-7 and/or B-14 (a) permit holders shall ship leaf and/or partially manufactured tobacco out of any province. CHAPTER IV Wholesale Leaf Tobacco Dealers SECTION 12. (a) Building A person who wishes to engage in tobacco business as a wholesale leaf tobacco dealer shall provide himself with at least one warehouse for use in storing leaf or partially manufactured tobacco. All warehouses covered by the same assessment number as approved by the Commissioner of Internal Revenue shall be located within the same province; Provided, that wholesale leaf tobacco dealers using more than one warehouse in any province or district shall be required to keep an official register and guia book in those warehouses only from which leaf or partially manufactured tobacco is: (1) Consigned out of the province or region from which it is produced; (2) Consigned or sold to another wholesale leaf tobacco dealer or to a retail leaf tobacco dealer, or Redrying Plant; (3) Consigned to manufacturers of tobacco products; (4) Received from other tobacco dealers. In case a tobacco dealer has aside from his main warehouse, sub-buying stations in different municipalities, he shall keep the official register book (BIR Form No. 31.46) and official guia book in his main warehouse and an official subsidiary register book in each of his sub-buying stations. Subsidiary record books should be registered in the office of the Collection Agent or the office of the Revenue District Officer of the province. When the purchased tobacco of a branch or sub-buying station is only temporarily stored in the sub-warehouse and no baling or packing whatsoever will be done in the said warehouse, duly registered subsidiary record books, shall be used only with written permit from the Commissioner of Internal Revenue. All warehouses must be built of strong or mixed materials; if mixed materials are used, the frame thereof must be made of durable wood, but the roof may be of cogon, nipa, or galvanized iron (GI) sheets, while the sides may be covered with double sawali or bamboo. The warehouse may be made of concrete flooring and walling with GI sheets, or the floor may be of concrete, tiles, bricks stones or similar materials. However, if only wood or bamboo are used for flooring, the same should be raised at least eighty (80) centimeters above the level of the ground and be capable of supporting the weight of the tobacco and be constantly kept in good condition. If part of a building is used as a tobacco warehouse, it must be entirely separated from the rest of the building by substantial walls or ceilings and shall have no opening into any other buildings or into part of the same building, except into a common passage and the necessary fire escape. A tobacco warehouse shall be used exclusively for the packing, handling and storing of leaf or partially manufactured tobacco. During periods when no tobacco is stored in the warehouse, other commodities should not be stored therein, even temporarily without prior written permission from the Supervising Tobacco Inspector, if in the province, or the Tobacco Inspection Service, if in Manila; provided, however, that any and all such other commodities authorized to be stored therein shall be automatically removed once leaf tobacco or partially manufactured tobacco is brought in for storage; and provided, further, that this prohibition shall not apply to materials required for the handling, processing and/or packing of tobacco. A wholesale leaf tobacco dealer may use, in lieu of a separate warehouse, an approved warehouse of a warehouseman holding a tax receipt used exclusively for tobacco or a bonded warehouse, but only upon written permission from the Commissioner of Internal Revenue; Provided, that a section of the warehouse intended for this purpose is set aside for each wholesale leaf tobacco dealer storing his tobacco therein. The section of the warehouse set aside for a wholesale leaf tobacco dealer shall be used exclusively for the storing of the tobacco. (b) Press Each wholesale leaf tobacco dealer who at the same time intends to pack, repack, bale or rebale leaf tobacco, shall have at least in one of the warehouses, covered by an official register book, installed with a baling press capable of making compact, symmetrical, standard packages or leaf or partially manufactured tobacco. But in cases where the wholesale leaf tobacco dealer will handle only flue-cured Virginia leaf tobacco not in the redried form, the baling press is not necessary. (c) Scales . Each person before engaging in business as wholesale leaf tobacco dealer shall have at least one licensed platform scale or steelyard capable of accurately weighing leaf tobacco in quantities equal to his largest packages and sensitive to the weight of one kilo. (d) Wholesale Leaf Tobacco Dealers Buying Only Packed or Baled Leaf or Partially Manufactured Tobacco . Notwithstanding the above requirements for tobacco warehouse and baling press, a person may be a wholesale leaf tobacco dealer upon approval by the Commissioner of Internal Revenue of an application therefor; provided he will only purchase from other wholesale leaf tobacco dealers packed or baled leaf tobacco exclusively intended for export. Tobacco leaf for export should be packed in accordance with these regulations before being transferred to the buyer. This type of wholesale leaf tobacco dealer is not permitted to repack or rebale tobacco except in the warehouse of the seller; in no case shall be buy loose leaf tobacco. The scope of his tobacco business is limited to purchases from other wholesale leaf tobacco dealers, Redrying Plants (L-3R),packed tobacco of the Philippine Tobacco Administration (PTA) and/or Philippine Virginia Tobacco Administration (PVTA). SECTION 13. Procedure for Engaging in Business as a Wholesale Leaf Tobacco Dealer . (a) Every person desiring to engage in business as a wholesale leaf tobacco dealer shall file an application for a permit with the Commissioner of Internal Revenue, or his authorized representative in the district in which the business is to be carried on, together with a statement of the number of warehouses to be used, specifying the control or main tobacco warehouse for which he shall secure an official register book (BIR Form No. 31.46). To the application in quadruplicate, there should be attached a recent passport photograph of the manager or owner and pictures of the front and side-views of the tobacco warehouse, as well as a sketch of the floor plan of same. If it is rented warehouse, the contract of lease shall be attached to the application. In cases where the applicant is a FACOMA, tobacco growers association, federation or corporation, there shall be attached to the application the articles of incorporation and by-laws, and the certificate of registration of same with the Securities and Exchange Commission. Pending approval of the application by the Commissioner of Internal Revenue, the applicant should not engage in the wholesale of leaf tobacco. Tender of payment of P100.00 as annual fixed tax [Sec. 182 (a) (3) (m) of the Tax Code] by a new applicant shall be accepted only upon production of a duly approved L-3 and/or L-6 permit. (b) If the authorized representative of the Commissioner of Internal Revenue, upon inspection of the premises, building and equipment to be used in business, finds that they are in accordance with the law and regulations governing the business of tobacco dealers, and knows of no reason why the permit applied for should not be granted, he will forward the application to the Commissioner of Internal Revenue, with his recommendation for its approval. (c) If, however, the requirements of the law and regulations are not complied with or if the authorized representative of the Commissioner of Internal Revenue is aware of any reason which should cause the disapproval of the application, the same shall be forwarded to the Commissioner of Internal Revenue, recommending disapproval with the detailed explanation of the grounds therefor. (d) Upon receipt of the application papers by the Commissioner of Internal Revenue with the recommendation of his authorized representative, action will be taken as circumstances warrant; in the event of approval, the Supervising Tobacco Inspector of the District will be so advised; and the issuance of the annual fixed tax receipt and forms will be made as provided for in the next succeeding paragraph. In the event of disapproval, the applicant will be so advised in writing by the Commissioner of Internal Revenue or his authorized representative. (e) Installation of Forms , Register and Fly-Leaf Certificate . Upon receipt by the Supervising Tobacco Inspector of the approval of the application for a permit to engage in tobacco business as a wholesale leaf tobacco dealer, he shall endorse the application to the BIR Collection Agent, or in case no such agent is assigned in the locality, to the Municipal Treasurer within whose jurisdiction the tobacco business is to be established, for transmittal to the licensee. At the same time the applicant will be advised to get the official register book (Form No. 31.46),advice slip (Form No. 31.49) and transcript sheets (Form No. 31.47) from the office of the Supervising Tobacco Inspector; in the absence of the latter, the BIR Tobacco Inspector assigned in the district shall cause the owner or manager of the tobacco business to execute and sign the certificate on the fly-leaf of the official register book. This certificate shall be attested by said tobacco inspector. The above mentioned officer shall explain explicitly to the new L-3 and/or L-6 permittee the provisions of the laws and regulations pertinent to the tobacco business. The Tobacco inspector shall detach the four (4) copies of the application. The original shall be retained by the applicant. The duplicate and triplicate shall be forwarded to Manila, one copy for the Records Section of the Bureau of Internal Revenue and the other for the Tobacco Inspection Service. The quadruplicate shall be retained by the tobacco inspector. The same procedure shall be followed for the fly-leaf. Whenever a second or subsequent official register books or other forms in connection with the L-3 and/or L-6 permits are needed by the wholesale leaf tobacco dealer because he has used up the ones last issued to him, a letter of requisition addressed to the Commissioner of Internal Revenue shall be prepared and signed by the L-3 and/or L-6 permittee requesting the forms; if the request is for an official register book, it should indicate whether it is the second or third book and so on; and if an official guia book is requested, the serial number immediately following the last guia issued should be indicated. No forms shall be issued to any wholesale leaf tobacco dealer without the prescribed written request therefor. All used forms shall be kept by the owner or manager, intact for a period of five (5) years from the date of issuance unless sooner demanded by a a duly authorized internal revenue officer. (f) Supervising Tobacco Inspector to Keep in Stock Wholesale Leaf Tobacco Dealer's Forms . In order to facilitate compliance with the provisions hereof, the Supervising Tobacco Inspectors in tobacco producing provinces shall keep in stock a sufficient supply of the necessary forms for local and for export transactions to meet the ordinary demand of wholesale leaf tobacco dealers. (g) Changes , Substitutions , Additions etc . All contemplated changes in the matter set forth in the application for a permit to engage in business as a wholesale leaf tobacco dealer shall be made the subject of a written advice address to the Commissioner of Internal Revenue, thru the Supervising Tobacco Inspector of the Regional District, who shall notify the tobacco dealer in writing whether he has any objection thereto and forward the advice and a copy of the notification to the Commissioner of Internal Revenue. In cases where changes on the prepared BIR forms are imperative and what is already written has to be erased and/or changed, the L-3 and/or L-6 permittee shall always initial each erasure or alteration and have the same properly authenticated by the Supervising Tobacco Inspector or BIR tobacco inspector of the district. If the tobacco is consigned to a Redrying Plant, the BIR tobacco inspector assigned therein may authenticate the same. No erasure or alteration whatsoever will be honored or sanctioned unless the same is duly authenticated by the Supervising Tobacco Inspector, a BIR tobacco inspector or other authorized representative of the Commissioner of Internal Revenue. SECTION 14. (a) Official Register Book . Upon approval of the application, the Commissioner of Internal Revenue shall furnish each wholesale leaf tobacco dealer free of charge an official register book (BIR Form No. 31.46) consisting of debit and credit pages which shall be used as a record of all leaf and baled or packed tobacco received and of all leaf tobacco removed. It shall be so arranged as to permit entries to be made as follows: cdt Before any entry is made on a page, there shall be written on the corresponding blank the name of the person in whose favor the official register book was issued, the municipality and province where the business is conducted, and the month and year during which the transaction to be entered on the particular page will take place. All leaf tobacco, whether loose, "in palillos","manos",bundles, packed in cases or hogsheads or bales, shall be entered on the date of receipt in the respective column provided on the debit page of the official register book. The entry shall indicate also the number of the official guia (BIR Form No. 31.48) accompanying the tobacco, the name and address of the dealer by whom issued, his paragraph and assessment number and the number of packages, bales or hogsheads of each class. Packages for export shall be entered so as to show the number of such packages by net weight in kilos or pounds. A separate column must be used for each different weight of packages. The final entry on each line shall be the total standard weight of all packed bales and hogsheads and loose leaf tobacco entered in that line. When leaf tobacco is purchased in bales for repacking but the actual net weight is found to be less than the standard weight, a separate column shall be created to show the actual net weight. The total of each column showing quantities shall be indicated at the bottom of each filled page and shall be carried forward to the next page, if there are more debit entries to be made during the current month. At the end of each month, the dealer shall write at the bottom of each column the total quantity of each kind of packages received during the month and the total of the standard weight column. When a page has been completely filled and/or after the last entry of each month, the owner or manager shall sign at the bottom of the page, certifying that the entries on that page contain a true and complete account and description of all tobacco received between the date of the first and last entries on the page, both dates inclusive. All rebaling, repacking for regrading and reclassification of purchases of leaf tobacco whether packed in bales, cases or hogsheads from other L-3 permittees and/or from bona fide tobacco planters, and intended for local sale or for export, shall have a separate line and column showing the total bales, cases or hogshead opened and the results after regrading, reclassification and repacking as illustrated hereunder: (1) Sample Entry No. of Loose leaf Standard Weight Release or Bales in Kilos in Kilos Waste in Kilos Transferred for rebaling 200 23,000 Not exceeding 3% Results after reclassification and repacking 195 450 22,425 35 Likewise, all tobacco under L-6 permit transferred for stripping either by hand or machine as partially manufactured tobacco shall have a separate line and column in the debit page of the official register book showing the total bales, casks or hogsheads opened for processing and the results as illustrated hereunder: (2) Sample entry Standard Weight of Partially Powder No. of Net Weight Manufactured Siftings Stems or Waste Bales in Kilos Tobacco in Kilos in Kilos in Kilos in Kilos (115 kls.) Transferred for stripping 200 22,750 not exceeding 3% Results after stripping and rebaling 140 22,690 16,100 690 5,000 900 All transfers or removals of leaf tobacco packed in bales, cases or hogsheads shall constitute credit entries on the current credit page of the official register book in which the tobacco was previously a debit on the date of such transfers or removals. Before any entry is made on a credit page, the month and year in which it is accomplished should be written on the general heading of the page. All credit entries shall show the date of removal or transfer, the serial number of the official guia used, the name and address, schedule, paragraph and assessment number of the L-3 or L-6 permittee to whom removed or transferred, the number and classes of packages so transferred or removed, the total standard weight if removed for repacking or transferred to another L-3, and both the total standard weight and the actual net weight if removed to an L-6 or L-7 or to a retail leaf tobacco dealer. All leaf tobacco received in the L-6 shall be entered in the official register book at the actual net weight. In cases where the tobacco is for export, each exportation shall be entered in Red Ink on the current credit page of the official register book along the general lines prescribed for other credit entries so as to show the date of removal, the serial number of the official guia accompanying the packed tobacco to the foreign bound vessel, the name and address of the consignee to whom the shipment is made, the number and net weight of standard bales, casks, cases or hogsheads. A separate horizontal line shall be used for each transaction. Upon completion of each debit and/or credit page, the sum of the entries in each column shall be entered at the foot thereof and carried forward in the corresponding columns of the next succeeding debit and/or credit page. At the close of each month, the balances resulting from the subtraction of the sums of each column in the credit page from the sums of like columns of the debit page shall be shown under the corresponding columns on the next to the last line of the credit page. The sum of all column balances shall be the stock on hand ,which shall be entered at the bottom of the credit page. The stock on hand at the end of each month shall constitute the first entry on the debit page of the succeeding month. At the bottom of each completed debit as well as credit page, the owner or manager shall certify, within the month, to the correctness of the entries made during the month. (b) Manner of Accounting for Loose Leaf Tobacco Purchased Directly from the Tobacco Planters and Shrinkage of Allowance Before and After Baling or Packing . From time to time as a wholesale leaf tobacco dealer may desire to bale his loose leaf tobacco, he shall draw a line under the last figures in the column for loose leaf tobacco, foot same, and make the following entry opposite thereto: "Transferred for Baling".The tobacco will then be packed in bales of standard weights and taken up on the column headed "Number of bales of each denomination".This entry will show the date of packing, the number of bales and the standard weights. The total weights of the tobacco so baled will be deducted from the weight of loose leaf tobacco by the footing of the column abovementioned and the difference will be shown as: "Loss through shrinkage",but this shrinkage should in no case exceed three per cent (3%) of the total loose leaf and baled tobacco handled for the crop, and any loose leaf tobacco leaf over shall be taken up in the proper column with the following notation placed before it: "Left over from baling".This entry will bear the same date as, and will immediately follow, the entry of tobacco which has been baled. Tobacco purchased by wholesale leaf tobacco dealers directly from the tobacco planters in sticks or "palitos",shall be allowed a ten per cent (10%) shrinkage due to the handling of said loose leaf tobacco before it is baled or packed by the L-3 dealer-buyer. The said shrinkage allowance of ten per cent (10%) shall be deducted from the total gross weight of all tobacco purchased from the tobacco planters during the buying season. This shrinkage allowance shall be deducted immediately from the total gross weight of the loose leaf tobacco purchased (excluding the weight of the sticks or "palitos" of the loose leaf tobacco so purchased) before recording the resulting net weight in the purchase invoice or in the official register book of a duly licensed wholesale leaf tobacco dealer. (c) Submission of Transcript Sheet . On or before the eighth (8th) day of each month, wholesale leaf tobacco dealers shall submit to the Revenue District Officer or BIR Collection Agent or where no such agent is assigned, to the Municipal Treasurer within whose jurisdiction their business is located, a complete and exact transcript of their official register book on transcript sheets (BIR Form No. 31.47).The transcript sheet shall show all their transactions on leaf and partially manufactured tobacco received and removed during the month immediately preceding. The official transcript sheets shall be submitted for each month regardless of whether there were transactions or not. Each transcript sheet shall be signed by the Revenue District Officer or BIR Collection Agent or Municipal Treasurer receiving the same and the date of receipt shall be noted therein. (d) Submission of Advice Slips . Wholesale leaf tobacco dealers shall fill out and attach to the transcript sheets for submittal by them an "Advice Slip" for each entry of removal in the credit page of the transcript sheet. The said receiving officer shall detach the advice slips and forward them directly to the Supervising Tobacco Inspector of the province or to the Revenue District Officer, where the tobacco was shipped as indicated in the "advice slip" and shall forward the transcript sheets to the Tobacco Inspection Service. Upon receipt of said advice slips, the tobacco inspector assigned in the Tobacco Inspection Service, shall immediately verify or investigate the shipment of tobacco indicated in the advice slips, and submit reports of his findings and recommendations to the Chief of the Tobacco Inspection Service. Advice slips shall show the consignor assessment number, name of the province to which shipments are made, the name of the consignor and the province, municipality, barrio, street and house number of his business as wholesale leaf tobacco dealer. Each shipment shall be entered on a separate line showing the date of each official guia accompanying the tobacco shipments, the serial number of the official guias, the name of the person to whom shipped, his address by municipality, barrio, street and assessment number, the number of bales, casks, hogsheads or standard packages on each official guia, and their net weights if the consignee is a manufacturer of tobacco products or a retail leaf tobacco dealer. After the advice slip has been completed, the owner or manager shall certify that it is a correct and true abstract of his official register book. (e) Index and Delinquency Record . To the inner side of the back cover of each official register book, there will be attached before it leaves the Bureau of Internal Revenue and issued or sent to the L-3 permittee, a plain durable white paper on which the internal revenue officer concerned will note the warnings and instructions given to, and the delinquency cases and other violations of Internal Revenue Regulations, etc.,committed by, the wholesale leaf tobacco dealer or authorized manager of the tobacco business to whom the official register book was issued. The instructions or warnings shall be concise, clear and understandable to the person concerned. Repetition of the same offense will be dealt with accordingly, and the provisions of the laws or regulations shall be so stated for reference. Each notation will be made at the same time the warnings or instructions are given and shall show the date on which particular provisions were violated and the nature thereof. The owner or manager shall affix his signature opposite the notations and signature of the Internal Revenue Officer. (f) The Use of Guia . (1) Wholesale leaf tobacco dealers shall prepare an official guia for each removal of leaf or partially manufactured tobacco, inserting therein and on each record stub, the names of the province and municipality where the business is located, the complete name and address of the consignee, his schedule, paragraph and assessment number, the date of removal, the number of bales, casks, cases or hogsheads of standard weight and the type and grade of tobacco being removed. If the consignee is a manufacturer of tobacco products or retail leaf tobacco dealer, the net weight per package transferred shall be shown. The owner or manager shall sign the stub and the official guia and shall certify that it contains the true schedule, paragraph and assessment number of the consignee, and the quantity of leaf tobacco sold or transferred. Official guias by which leaf tobacco is consigned to domestic tobacco dealers shall go forward with, and at no time be separated from, the tobacco it covers until received by the consignee. An official guia shall be issued, on the date of removal, for every truck load of tobacco. In no case shall only one official guia be issued to cover shipments carried by several trucks even if the said trucks go together and to the same consignee. The official guias shall be issued in consecutive numbers, and the corresponding entries in the official register book shall be made on the date of issuance of the guias. (2) In cases where changes on the prepared official guia are imperative and what is already written has to be erased and/or changed, the consignor shall always initial each erasure or alteration and shall have the same properly authenticated by Revenue District Officer, the Supervising Tobacco Inspector, a BIR tobacco inspector or by another authorized representative of the Commissioner of Internal Revenue. If the tobacco is consigned to a Redrying Plant, the BIR tobacco inspector assigned therein may do the authentication. No erasure or alteration whatsoever will be honored or sanctioned unless the same is duly authenticated by any one of the above-mentioned officials. (3) If the official guia accompanying a shipment of tobacco is lost during transit, the consignor or carrier of the tobacco shall immediately execute an affidavit, explaining the circumstances surrounding the loss of the guia. The case shall then be reported to the Commissioner of Internal Revenue or his duly authorized representative or to the office of the Tobacco Inspection Service, so that a Certificate of Lost Guia (BIR Form No. 545) can be issued in lieu of the lost guia. A certificate of Lost Guia must be obtained from the local BIR tobacco inspector, the Revenue District Officer or the Tobacco Inspection Service, before the tobacco can be accepted by the buyer or consignee, to avoid penalties. (4) All bales of leaf tobacco marked R.C. (Returned for Reclassification) by the classifier or grader of an L-3 permittee or Redrying Plant (L-3R) must be covered by a return guia from the consignee before the said bales of tobacco can be returned to the consignor. In no case shall the owner of the R.C. tobacco dispose it of to another L-3 dealer or Redrying Plant without first entering or recording it in his official register book. A new guia shall be issued by the owner of the tobacco to the last buyer. When an entire lot of tobacco is rejected by the consignee and the consignor finds another buyer, the name and address of the consignee who rejected the tobacco may be crossed out or cancelled in the guia and the name and address of the new buyer super-imposed therein. The Supervising or BIR Tobacco Inspector assigned in the Redrying Plant or the Chief of Tobacco Inspection Service, must authenticate the change. A corresponding correction shall be made on the official register book of the consignor and on the guia stub. All returned tobacco marked R.C. should be debited in the official register book of the owner. If that tobacco is reclassified and submitted again for re-inspection, the corresponding fee shall be paid. (5) Guias wrongly prepared shall not be detached from the guia stub when cancelled and the word "Cancelled" shall be written in red ink or red pencil across the whole page. When the guia has been detached from the stub and subsequently found to have been wrongly prepared, the case shall be immediately brought to the attention of the Supervising Tobacco Inspector or other authorized representative of the BIR; the guia shall be re-attached to the stub and cancelled. The cancellation shall be authenticated by the authorized BIR representative. (g) Export Guias and Proof of Export . Official guias covering tobacco for exportation shall be prepared in red ink and shall accompany the tobacco as far as the export loading point. The dealer issuing the official guia shall see to it that the Bureau of Internal Revenue receives it together with a receipted copy of the bill of lading within thirty (30) days after it was issued unless the Commissioner of Internal Revenue has granted an extension of time. The duplicate copy of the Certificate of Inspection of the exporter, showing its reference number, total number of bales and kilos or pounds, shall be attached thereto. At the back of the bill of lading there shall appear a dated certificate signed by the exporter and worded as follows: I hereby certify that this shipment is composed of __________________________ tobacco removed from _____________________________, L-3/L-7 __________ under guia No. ____________________ consisting of ________________ bales and __________________ kilos or pounds with BIR Reference No. ____________. After verification of the application for inspection, the same shall be returned to the exporter for his record purposes. (h) Where Records , Etc . Shall Be Kept . The official register book, blank official guias, guia stubs, official guias received from other tobacco dealers through purchases and other BIR Forms issued by the Commissioner of Internal Revenue in connection with the tobacco business shall be kept in the main warehouse or establishment of the tobacco dealer. In no case shall the record books be carried outside the main warehouse or establishment by any person without a written permission from the Commissioner of Internal Revenue or Supervising Tobacco Inspector of the District. These record books must at all times be ready for inspection by other authorized internal revenue officer. (i) Completed Books of Tobacco Dealers . Completed official register books and guia stubs of tobacco dealers continuing in business shall be kept by said dealers for a period of five (5) years from the date of issue unless sooner required by the Supervising or Tobacco Inspector to surrender them to the local BIR Collection Agent or to the Municipal Treasurer (if no Collection Agent is assigned in that locality) who shall forward the same to the Commissioner of Internal Revenue, thru the Supervising Tobacco Inspector or Revenue District Officer. The Collection Agent or Municipal Treasurer, as the case may be, shall issue the corresponding receipt, noting thereon the name and address of the party concerned, the number of official register and guia books received and the last serial number of the guia stubs. Completed subsidiary books of tobacco dealers shall likewise be kept in the main warehouse or establishment and treated in the same manner as mentioned above. (j) Retiring Tobacco Dealer . A retiring tobacco dealer shall comply with the following requirements: (1) File a written request for retirement with the Commissioner of Internal Revenue, specifying his permit or permits affected; (2) Surrender to the local Collection Agent or Supervising tobacco Inspector if in the province, or the Tobacco Inspection Service if in Manila, the said permit or permits, official register books, unused guias, guia stub, guias received, transcript sheets and advice slips, as soon as he disposes of all his tobacco stocks; (3) Deliver to the BIR Collection Agent or Supervising Tobacco Inspector, as the case may be, a transcript sheet and advice slips corresponding to the entries made in his official register books which were not included in the transcript sheets last submitted. The aforementioned forms shall not be accepted by the Collection Agent or Supervising Tobacco Inspector, as the case may be, unless the last credit pages of the official register books bear a dated and signed notation of the Supervising or Tobacco Inspector to the effect that the tobacco dealer presenting them has retired and that he has legally disposed of all his tobacco stocks. The BIR Collection Agent or Supervising Tobacco Inspector, as the case may be, shall send all the aforementioned forms to the Tobacco Inspection Service. If after proper verification is made by a duly authorized representative of the Commissioner of Internal Revenue, no discrepancy is found, the retirement shall be approved. (k) Tobacco Dealers Desiring to Transfer Their Permits or Tobacco Business to Others . No wholesale tobacco dealer shall transfer his owner permit, including the tobacco warehouse and record books, to another person without prior written request submitted to, and approved by the Commissioner of Internal Revenue, Manila. Before the permittee could transfer his tobacco business, he shall dispose of all his tobacco stock, pay all taxes, tobacco inspection fees and other government obligations and also submit his last monthly transcript sheet to the Commissioner of Internal Revenue, thru the Supervising Tobacco Inspector. To the request shall be attached an affidavit of acceptance of the transferee and an affidavit of the former owner that he guarantees the payment of all back taxes due on his tobacco business, if there be any. The Supervising Tobacco Inspector, upon receipt of the request for transfer, shall investigate the premises of the tobacco dealer's warehouse and if any remaining tobacco stocks are found, said dealer shall be required to dispose of the same to another duly licensed tobacco dealer before any action is taken. The official register books, and other records shall be thoroughly checked to see that all entries therein were properly accounted for and that no violations of internal revenue regulations have been committed. When no discrepancy is found, the corresponding indorsement of the aforesaid request for transfer shall be forwarded with the appropriate recommendation, to the Commissioner of Internal Revenue for action. (l) Tobacco Dealers Desiring to Retire Temporarily From Business . Wholesale leaf tobacco dealers desiring to retire temporarily from business shall write a letter of request to the Commissioner of Internal Revenue stating the reasons therefor. Upon receipt of the letter, the Supervising Tobacco Inspector shall verify whether the dealer has any remaining stocks of tobacco in his possession; in the affirmative, the dealer must dispose of said tobacco stocks to another tobacco dealer before any action is taken on the requested temporary retirement. All taxes, fees and/or charges found due the Government must be paid before retirement. The letter shall be submitted to, and stamped received by, the Bureau of Internal Revenue, or if sent by registered mail, shall be postmarked, on or before the 31st day of December; otherwise the privilege tax receipt for the succeeding year shall automatically become due and payable without penalty on or before the 20th of January. The latest transcript sheets of the tobacco dealer's transactions shall be submitted with the letter. The Supervising Tobacco Inspector shall then prepare a report, endorsing the same to the Commissioner of Internal Revenue, on the surrendered registered books of the said tobacco dealer. The report shall state, among other things, that the retiree has paid all taxes, charges and fees due the Government and that no stocks of tobacco remain in his possession as shown and verified in the transcript sheet submitted. All the dealers register books shall be deposited in the Office of the Revenue District Officer of the province upon approval of the temporary retirement. If a dealer retires temporarily from business without complying with all the above requirements, and subsequently re-engages in tobacco business, the dealer shall be required to pay the annual fixed taxes corresponding to the years of his unofficial retirement plus a surcharge of twenty-five (25%) thereof. (m) Wholesale leaf tobacco dealers legally affiliated with the Philippine Virginia Tobacco Administration (PVTA) or Philippine Tobacco Administration (PTA) should secure a tax clearance certificates from the nearest BIR office, before applying for renewal of their privilege tax receipt as wholesale leaf tobacco dealer with the Commissioner of Internal Revenue, thru the Tobacco Inspection Service, Manila or from the Tobacco Inspection Service, Manila. Failure to pay the renewal of the annual fixed tax by L-3, L-3F, L-3R and/or L-6 permittees on or before the 20th day of January shall render them liable to the payment of the 25% surcharge unless retired from business on December 31st. (n) Fraction of a Kilo . Fractions of less than two-tenths (2/10) of a kilo need not be recorded in the official register books. SECTION 15. Tobacco Planters Who Become Wholesale Leaf Tobacco Dealers . Tobacco planters who intend to handle leaf tobacco of their own production after the manner of wholesale leaf tobacco dealers, shall conform with all requirements of the regulations affecting the wholesale leaf tobacco dealers who handle leaf tobacco produced by others. The leaf tobacco of their own production shall be recorded in their official register books (BIR Form No. 31.46) immediately after entering the warehouse and separately piled from tobacco other than his own production. SECTION 16. Tobacco Planters Who desire to Ship Their Tobacco from the Province of Origin . Tobacco planters not provided with official register books (BIR Form No. 31.46) and official guias (BIR Form No. 31.48) for wholesale leaf tobacco dealers may ship their own tobacco products from the province of origin in standard or export packages through wholesale leaf tobacco dealers, who shall assume all responsibilities for compliance with the law and regulations or through the Supervising Tobacco Inspector of the province where the tobacco was grown, who is furnished with a miscellaneous official register book and official guia for that purpose. The tobacco planters shall first pack, grade, and classify their left tobacco in standard bales and mark the packages in accordance with these regulations, and the Supervising Tobacco Inspector of the province, after having assured himself that the shipper is a bona fide tobacco planter, and that he is the producer of the tobacco as attested to by the Municipal Treasurer of the locality where the tobacco was grown, shall issue an official guia to accompany the tobacco shipment after inspection of the tobacco by the BIR Tobacco Inspector or other authorized revenue officer. The corresponding inspection fee shall be paid to the Office of the Collection Agent or Municipal Treasurer. An advice slip shall be prepared and forwarded by mail to the Supervising Tobacco Inspector of the district to which the tobacco is consigned. Each shipment shall constitute debit and credit entries in the miscellaneous official register book ,the name and address of the tobacco planter to be shown in each instance. No official guia, however, shall be issued by the Supervising Tobacco Inspector or wholesale leaf tobacco dealers to cover the shipments of tobacco owned by tobacco planters to tobacco dealers, unless the shipments are requested in writing by the consignee. In case the shipper has no definite buyer, the Commissioner of Internal Revenue if the destination is in Manila, or the Supervising Tobacco Inspector if the province, shall be the consignee. When a buyer is subsequently found, the said official shall in turn issue a miscellaneous official guia to the buyer. SECTION 17. Signs must be Displayed . Every wholesale leaf tobacco dealer shall place and keep on the outside of every building used as tobacco warehouse or on the part of said building where he received, keeps or removes leaf tobacco, a signboard stating the full name, schedule, paragraph and assessment number of the business, in letters and figures not less than six (6) centimeters high. The signboard shall be placed in such a manner as to be seen conspicuously outside and not inside the establishment. A leaf tobacco dealer using two or more warehouses shall place a signboard on each warehouse, with the following additional marks: Warehouse A, B, or C, A, standing for the first warehouse, B, for the second, C, for the third, and so on. SECTION 18. To Whom Sales may be Made . Tobacco dealers may sell or dispose of leaf tobacco and/or partially manufactured tobacco only in standard packages and/or bales to the following: (a) registered tobacco factories (L-7);(b) registered redrying plants (L-3R),(c) FaCoMas, duly organized according to law, L-3F, (d) registered wholesale leaf tobacco dealers (L-3);(e) retail leaf tobacco dealers [B-14 (a)];and/or (f) tobacco dealers engaged in threshing and/or stripping leaf tobacco (L-6).Tobacco dealers having packages and/or bales for export which are not of standard sizes, may dispose of them locally, only with the permission of the BIR Commissioner. SECTION 19. L-6 Wholesale Leaf Tobacco Dealers : (a) Procedure for Engaging in Business . The procedure shall be the same as provided for L-3 permittees unless otherwise specified in these regulations. (b) Exemptions Regarding L-6 Permittees Who are at the Same Time L-7 Permittees . An L-6 permittee, who is at the same time holder of an L-7 permit, is allowed to process his tobacco for export under his L-7 establishment, provided that all his export shipments are recorded in his L-6 official register book, and provided further, that the partially manufactured tobacco for export is separately stored from his L-7 stocks. (c) An L-6 permittee who is at the same time holder of an L-3 permit can store bales of partially manufactured tobacco in his L-3 warehouse, provided that this tobacco is intended and already packed for export and provided, further, that the bales are on separate piles and signboards are placed on the piles indicating the number of bales temporarily stored therein while awaiting shipment. CHAPTER V Buyers for Wholesale Leaf Tobacco Dealers SECTION 20. Appointment of Buyers for Wholesale Leaf Tobacco Dealers : Supervising Tobacco Inspector or BIR Tobacco Inspector to Ascertain Qualifications of Buyers (L-3 Permittee) :A wholesale leaf tobacco dealer (L-3) may appoint buying agents to be known as buyers for wholesale leaf tobacco dealers (L-3 ) but only upon written application to, and approval thereof, by the Commissioner of Internal Revenue or the Chief of the Tobacco Inspection Service. Attached to said application shall be three (3) pictures each of the proposed appointees and the warehouses as well as the floor plans of the same. The status of the appointed buyers (either fixed salary and/or on commission basis) and the exact territory of their buying operations must be stated in the application. Before the said application may be acted upon by the Commissioner of Internal Revenue, it shall first be referred to the Supervising Tobacco Inspector in the district where the L-3 permittee is located for investigation. A registered buyer for wholesale leaf tobacco dealer shall be provided with a registered subsidiary record book wherein to enter all purchases of loose and/or baled leaf tobacco. All Tobacco purchased by said appointed tobacco buyer shall be entered in the debit page of the subsidiary record book, and the leaf tobacco can be transferred from time to time to the main warehouse of the principal either loose or baled. In no case shall said appointed buyer sell or transfer purchased tobacco to another L-3, L-6 and/or L-7 permittee without coursing such sale or transfer thru the official register book of his principal. SECTION 21. Records of Buyers for Wholesale Leaf Tobacco Dealers . (a) Buyers for wholesale leaf tobacco dealers shall provide themselves with registered subsidiary record books. On each day that they receive leaf tobacco, they shall make entries in the current debit page of the book to show the date of receipt, the total number of kilos of leaf tobacco, number of "palillos","manos","pinongos",or other units of measure, and the name and address of the tobacco planters from whom purchased. Buyers shall indicate on the current credit page the date of each delivery to their principal, indicating therein whether the tobacco is loose or baled and the quantity and weight of the tobacco. These record books shall be available at all times and presented upon demand by the duly authorized representative of the Commissioner of Internal Revenue for verification. (b) Disposition of Appointments and Records of Retiring Tobacco Buyers for Wholesale Leaf Tobacco Dealers : When an appointed buyer ceases to buy tobacco, he shall surrender to his principal his appointment as buyer as well as all his record books. The wholesale leaf tobacco dealer shall thereupon promptly advise the retirement of the buyer to the Supervising Tobacco Inspector of the province either directly or through the local Collection Agent or Municipal Treasurer. The record books of the said tobacco buyer shall be forwarded to the Supervising Tobacco Inspector through the Collection Agent or Municipal Treasurer (the latter only in case of non-availability of the former) but only after they have been properly checked by the BIR tobacco inspector, for safe-keeping during a period of five (5) years, at the end of which period they may be destroyed by the Commissioner of Internal Revenue or his duly authorized representative. SECTION 22. Limitations and Place of Operations of Buyers for Wholesale Leaf Tobacco Dealers . A buyer for wholesale leaf tobacco dealer is allowed to buy only within the province where the business of his principal is located. Each tobacco buyer shall buy tobacco solely for one principal. If the principal has more than one L-3 permits the buyer shall purchase only for the business operated under each particular official register book for which his appointment was secured, and tobacco purchased by such buyer shall be shipped to the tobacco warehouse used under the same official register book. No tobacco buyer for wholesale leaf tobacco dealer shall have control over, nor have possession, of, any tobacco which does not belong to his Principal and the purchase of which has been duly authorized by said Principal. In no case shall an L-3- permittee dispose of tobacco to any buyer other than his own principal. All purchases by a tobacco buyer shall be stored in a warehouse having a permit from the Commissioner of Internal Revenue. CHAPTER VI Retail Tobacco Planter-Dealers SECTION 23. Permit for Planter of Leaf Tobacco to Consumers . (a) A planter may sell leaf tobacco directly to consumers by a securing an L-5 permit. To secure the permit, he must file a written application with the Supervising Tobacco Inspector, thru the Collection Agent together with a certificate of the Municipal Treasurer of the locality, attesting that the applicant is bonafide tobacco planter of the locality wherein he desires to engage in business. Having ascertained that the applicant is a bona fide tobacco planter, and he desires to dispose of his own production, the Supervising Tobacco Inspector of the district where the tobacco is produced shall issue a permit to the applicant. The planter shall keep the permit in his possession or place of business and exhibit the same for inspection of all times upon demand by the BIR Tobacco Inspector or the other authorized representative of the Commissioner of Internal Revenue. (b) At the close of each month, the Supervising Tobacco Inspector shall submit a detailed statement of sales to the Commissioner of Internal or the Chief of the Tobacco Inspection Service. The report shall show the names and addresses of the persons to whom the L-5 permits were issued during the month, the area of the tobacco land under cultivation by each, and the transactions thereof. A copy of the said statement shall be sent by the Supervising Tobacco Inspector of the district to the Commissioner of Internal Revenue or Chief of the Tobacco Inspection Service. SECTION 24. Where the Business may be Conducted . Tobacco planter-dealers may conduct their business either at a fixed stand or as peddlers, but each shall invariably have a record book (BIR Form No. 275) specified for the business. The place where the L-5 may dispose of his tobacco shall be specified by the Supervising Tobacco Inspector of the district in the permit granted. aisadc SECTION 25. Quantities of Leaf Tobacco in One Sale by Retail Tobacco Planters Selling to Consumers . L-5 permittees may dispose of their whole crop, or such parts thereof as are not sold to registered wholesale leaf tobacco dealers or other authorized dealers, by selling to consumers, but only in quantities not exceeding one kilo to any one person during any one month. Any quantity of leaf tobacco found to have been sold in non-compliance with the said requirements, shall be confiscated by the Government and the seller shall be punish under Section 14 of Act No. 2613, as amended. CHAPTER VII Retail Leaf Tobacco Dealer SECTION 26. Privilege Under Retail Leaf Tobacco Dealer Permit [B (a) . ] . A retail leaf tobacco dealer's privilege tax receipt entitles to sell leaf tobacco at retail, either at a fixed stand or by peddling. Each person engaged in peddling leaf tobacco at retail is required to provide himself with a separate tax receipt [B-14 (a)]; and a certificate as a retailer under R.A. 1180, if he is not a Filipino citizen. SECTION 27. Limitation on Retail Leaf Tobacco Dealers . A retail leaf tobacco dealer may purchase leaf tobacco in standard packages only, and only from L-3 permittees. In no case may his total purchases in any calendar month exceed two hundred (200) kilos of the ordinary or liso type of leaf tobacco, six hundred (600) kilos of the thick or heavy types of leaf tobacco officially classified and marked as batek , morado , champorado , catabacuan or escogido which are characterized either by the presence of large reddish brown spots (not white spots) or "frog-eyes" (Cercosphora nicotiana) or large and prominent veins or both; and 200 kilos of sundried (not flue-cured) Virginia leaf tobacco, the color of which is light brown or dark brown and may be tinted with light yellow color. No purchase shall be allowed unless an application shall be filed by the supplier under oath with the Tobacco Inspection Service, stating that the tobacco to be sold belongs to the liso ,heavy type, or sun-dried Virginia leaf tobacco and is verified as such by the BIR Tobacco Inspector or other authorized representative of the Commissioner of Internal Revenue. Upon receipt of the notification of the sale, the BIR Tobacco Inspector concerned shall ascertain and verify the type of the tobacco actually sold. For every purchase an official guia shall be issued to the purchaser by the supplier to the L-3 permittee. For accounting purposes, the type or types of leaf tobacco sold and the selling price shall be indicated in the official guia and guia stub and in the retailer's purchase book. To distinguish the type or types of leaf tobacco sold under this provision, a separate column shall be provided in both the debit and credit pages of the official register book of the wholesale leaf tobacco dealer for the purpose of entering the receipt and sale of the liso ,heavy type and sun-dried Virginia leaf tobacco. SAMPLES OF: Certificate of the type of leaf tobacco purchased from L-3 permittee. . REPUBLIC OF THE PHILIPPINES ) ___________________________ ) S. S. ___________________________ ) I, ________________, owner/manager of the establishment ____________________ L-3 _______ hereby declare under oath and in accordance with Section ____ of Regulations No. _____. That I shall sell ______________ kilos/bales of heavy type ______________ kilos/bales of liso type ______________ kilos of sundried Virginia type to _____________________________ of _______ (Name) _________________________________________ (Address) holder of B-14 (a) No. ___________ for the year ____, issued at ___________________, on ______________ __________________, 19____; and That I shall present the said leaf tobacco to the Tobacco Inspector for verification and certification that the same belong to the types described above. _________________, ______________, ____________ (Locally) (Province) (Date) Subscribed and sworn to before me this _______ day of ______________ 19; affiant exhibit to me his Residence Certificate No. A-_________ issued at ________________, on ____________________, 19 _______. __________________ Tobacco Inspector (Subscribing Officer) A retail leaf tobacco dealer shall keep a purchase book, which shall show the following items for each purchase made by him (1) the date of purchase, (2) the quantity purchased, (3) the name of the wholesale leaf tobacco dealer from whom purchased, (4) the schedule, paragraph, and assessment number of the wholesale leaf tobacco dealer, and (5) the signature of the L-3 permittee. When making a purchase, a retail leaf tobacco dealer shall present the purchase book to the L-3 permittee who shall enter the sale in the purchase book and affix his signature after the entry. Before the retail leaf tobacco dealer's purchase book is used, it shall be approved by, and registered with, the Commissioner of Internal Revenue, if in Manila, or the Supervising Tobacco Inspector, if in the province. A provincial retail leaf tobacco dealer who intends to purchase liso ,heavy type, or sundried Virginia leaf tobacco from a wholesale leaf tobacco dealer in Manila and cannot come personally to Manila, may purchase tobacco through mail-order by writing a letter to the supplier stating, among other things, that he is a licensed retail leaf tobacco dealer as shown by his enclosed photostatic copy of the B-14 (a) privilege tax receipt for the current year and as certified by the Supervising Tobacco Inspector, Collection Agent or Municipal Treasurer, the latter only in case of non-availability of any of the former. Before a retail leaf tobacco dealer can renew and B-14 (a) license, he shall first apply under oath for a certificate of authority (clearance to continue in business) from the Commissioner of Internal Revenue or Chief of the Tobacco Inspection Service, if in Manila, or the Supervising Tobacco Inspector if in the province. This certificate of authority shall be obtained every year. The application for the B-14 (a) license shall be submitted not less than thirty (30) days prior to January 1st, of each year. No Collection Agent or Municipal Treasurer, as the case may be, shall renew a B-14 (a) license of any retail leaf tobacco dealer except upon the presentation of the certificate of authority. If the B-14 (a) license violates any provisions of these regulations, the Commissioner of Internal Revenue may cancel and demand the surrender of the certificate of authority issued him. SECTION 28. Retirement of Retail Leaf Tobacco Dealers . A retail leaf tobacco dealer, before being allowed to retire from business, shall dispose of all his leaf tobacco stocks or transfer the same to a duly registered wholesale leaf tobacco dealer under the supervision of a BIR Tobacco Inspector or other authorized Internal Revenue Officer who shall submit a report to the Commissioner of Internal Revenue, containing the quantity transferred and the name and address of the dealer to whom transferred. The authorized representative of the Commissioner of Internal Revenue shall then make a notation on the privilege tax receipt to the effect that all his stocks have been disposed of. No privilege tax receipt shall be accepted by the Collection Agent or Supervising Tobacco Inspector from any retiring retail leaf tobacco dealer without the required notation and presentation of documentary evidence of payment of all fees, charges or taxes due on his tobacco business at the time of retirement. All record books of the retiring retail leaf tobacco dealer, after complying with all the above requirements, the retiring retail leaf tobacco dealer shall surrender all his record books to the office of the Supervising Tobacco Inspector or to the office of the Collection Agent. To facilitate the transfer of tobacco from any retiring B-14 (a) to L-3 dealers, the latter are authorized to receive said tobacco even though not packed in standard packages. CHAPTER VIII Duties and Common Carriers SECTION 29. Carrier to Require Accurate Guias . (a) Carriers shall not accept leaf tobacco for transportation or shipment from one province to another unless the shipment is accompanied by an official guia (BIR Form No. 31.48) and the guia accurately describes the shipment. If in transit a common carrier finds any discrepancies between the tobacco described in the guia and the actual tobacco shipped, such discrepancies shall be noted on the reverse side of the guia by the carrier or his authorized representative who shall thereunder sign his name and state his title and the date and place noted. The discrepancies shall be brought immediately to the attention of the consignee and consignor upon delivery. The delivery must not be debited in the registered book of the consignee until the case has been investigated by the Tobacco Inspection Service. (b) Only Standard or Export Packages Acceptable for Transportation . Carriers shall refuse to receive for transportation from one province to another leaf tobacco not in standard or export packages unless the shipper is provided with a special permit from the Commissioner of Internal Revenue. (c) Guias to be Kept with Shipment by Carrier . Carriers shall keep official guias at all times with the tobacco load in their possession while in transit and deliver them to the consignee with the tobacco, and exhibit the same upon demand by a duly authorized internal revenue officer. Guias lost in transit shall be immediately reported to the nearest Tobacco Inspector or Supervising Tobacco Inspector for investigation and a Certificate of Lost Guia shall immediately be prepared to replace the guia lost. (d) The Consignee shall Acknowledge Receipt of the Consignment of Tobacco . The common carriers, shipping companies or other transportation agencies which delivered the tobacco load to the consignee as indicated in the official guia shall ask from the consignee a signed acknowledgment of the delivery to him of the tobacco shipment. CHAPTER IX General Provisions SECTION 30. Tobacco Planters Transporting Crops from Province of Production or Origin to their Home Province . A tobacco planter producing tobacco in a province other than that of his residence may be allowed to transport from the province of origin to his home province, with a written permit from the Supervising Tobacco Inspector of the municipality where the tobacco is produced by him. The special permit shall contain the exact number of kilos. The permit shall accompany the leaf tobacco transported and must be produced upon demand by an authorized Internal Revenue Officer. The said tobacco shall never be sold or retailed to other consumers, the same being solely for home consumption. SECTION 31. Persons Receiving an Irregular Shipment of Leaf or Partially Manufactured Tobacco or Shipment Without Guia must Make Report of Same . Persons who receive leaf and/or partially manufactured tobacco in standard and/or export packages unaccompanied by an official guia or a shipment which in any manner shows discrepancies from the description or other matters in the official guia must immediately report the facts of the case to the Supervising Tobacco Inspector or other authorized representative of the Commissioner of Internal Revenue. In cases where it can be established that an official guia was issued for the tobacco but was lost in transit, and the responsibility for the loss can be fixed, the Internal Revenue Officer concerned shall require the erring person to execute under oath a Certificate of Lost Guia ,affixing thereto a thirty-centavos (P0.30) documentary stamp. He shall then forward the certificate to the local Supervising Tobacco Inspector or BIR Tobacco Inspector assigned in the locality for appropriate action. Should the Internal Revenue Officer be unable to determine that an official guia was issued or to fix the responsibility for the loss, he shall report to the Supervising Tobacco Inspector where the tobacco was shipped, giving the names and addresses of the shippers and the consignee, the quantity received, and the date and other pertinent information. In case of discrepancy between the official guia and the tobacco actually received, the Internal Revenue Officer concerned shall forward the forms, duly accomplished, to the Supervising Tobacco Inspector of the district to which the tobacco was consigned, stating the facts borne out by the investigation, together with his recommendation. In case an unreported average or shortage is found, the entire shipment shall be embargoes until satisfactory explanation is secured from the erring party or a lawful settlement of the violation thereof made. Thereafter, the Internal Revenue Officer shall see to it that the tobacco actually received is properly debited in the book of the consignee. Official guia shall accompany reports of discrepancies and the internal revenue officer making the report shall initial the entry in the consignee's book to indicate that he has taken the official guia. SECTION 32. Records . All records and entries required on forms provided for in these regulations shall legibly be made in ink of durable quality during the day on which the transaction takes place. All forms which require signature upon completion shall be signed legibly. SECTION 33. Disposal of Waste, Refuse, Powder, Decomposed and/or Burnt Tobacco and Partially Manufactured Tobacco Unfit for Human Consumption to be used for Industrial and Agricultural Purposes . (a) A wholesale leaf tobacco dealer who intends to dispose of waste, refuse, powder, decomposed and/or burnt tobacco unfit for human consumption to be used for industrial or agricultural purposes may sell or give said waste to any farmer, fishpond owner, landowner, lease-land holder or agriculturist who desires to acquire the waste tobacco shall file a written application with the Commissioner of Internal Revenue, if in Manila, or the Supervising Tobacco Inspector if in the province. The following supporting documents are required to be attached to the letter of application: (1) Certificate from the Deputy Provincial Treasurer or BIR Collection Agent of the locality stating that the applicant is a bona-fide landowner, fishpond owner, lease-land holder, or agriculturist, and that he is not a dummy of a third party; cdta (2) Certificate from the Provincial Agriculturist of the province, certifying to the feasibility of using the said waste tobacco for industrial or agricultural purposes; (3) Attestation of the wholesale leaf tobacco dealer authorizing the applicant to acquire said waste tobacco. Upon approval of the permit by the Commissioner of Internal Revenue, one copy of the permit shall be given to the supplier of the waste tobacco, one copy to the Deputy Provincial Treasurer or Collection Agent, one copy to the Chief of the Tobacco Inspection Service, and one copy to the Supervising Tobacco Inspector. No credit shall be allowed to wholesale leaf tobacco dealers for the destruction of any waste, refuse, powder and/or other kind of tobacco unfit for human consumption which are destroyed not in the presence of a BIR Tobacco Inspector or other duly authorized Internal Revenue Officer. (b) Removal of Waste Tobacco Unfit for Human Consumption to be Used for Agricultural or Industrial Purposes . Before removal from the establishment of a wholesale leaf tobacco dealer, the waste tobacco shall be weighed and denatured. During transit, it shall be accompanied by an official guia, and shall be removed immediately after proper verification by the BIR Tobacco Inspector or other authorized representative of the Commissioner of Internal Revenue. No inspection fee need be paid thereon. In case the tobacco waste contains an excessive amount of moisture, the moisture content shall be determined by the air drying method and discounted by the BIR Tobacco Inspector supervising the weighing of the tobacco. After weighing, all waste tobacco may further be required to be denatured by thoroughly mixing with lime, ashes, fine soil, sand or manure to render it unfit for human consumption. After the waste tobacco has been inspected and weighed, the BIR Tobacco Inspector or other authorized Internal Revenue Officer shall see to it that the proper credit entry is made in the official register book. The said official shall initial the said entry in the official register book as well as sign the guia and guia stub. If the waste tobacco is for use on a land located at a considerable distance from the establishment from which the tobacco is removed, it shall be shipped and consigned to the Collection Agent, or to the Deputy Provincial Treasurer of the municipality where the waste tobacco is to be used, and the official guia shall be attached to the bill of lading accompanying the tobacco. Upon receipt of the waste tobacco by the BIR Collection Agent or the Deputy Provincial Treasurer, the bill of lading shall be delivered to him and he will see to it that, within one (1) month from the time the tobacco waste is received, the same is actually used for the declared purpose. A letter to this effect shall be forwarded by said official to the Commissioner of Internal Revenue, through the BIR Tobacco Inspector and the guia shall show the following on the reverse side: All the refuse, powder and waste tobacco covered by this official guia has been used/dumped, on my agricultural land/fishpond in the barrio of ______________________, municipality/city of ___________________, province of _________________________. No applicant for waste tobacco intended for industrial or agricultural purposes shall dispose of the said waste tobacco to another agriculturist or fishpond owner or lease-land holder. Only the person who has been issued the permit shall use the waste tobacco. (c) Storage of Waste Tobacco Unfit for Human Consumption . All waste tobacco intended for disposal either for dumping, burning or for industrial and/or agricultural purposes, shall be provided with separate storage space within the warehouse of the wholesale leaf tobacco dealer. (d) Destruction of Waste Tobacco . Any wholesale leaf tobacco dealer who desires to dispose of tobacco by burning must first secure a written permit from the Commissioner of Internal Revenue. No credit whatsoever will be allowed on waste tobacco destroyed by burning without such permit from the Commissioner. The destruction must invariably be under the supervision of a BIR Tobacco Inspector or other authorized Internal Revenue Officer. The Internal Revenue Officer, after witnessing its destruction, shall initial in red ink the credit entries in the dealer's official register book showing the weight of the waste tobacco destroyed by burning in his presence, and he shall report in writing the facts to the Commissioner of Internal Revenue, stating the date, place, kind, and weight of the tobacco destroyed, the manner of destruction, the schedule, paragraph and assessment number of the tobacco dealer concerned. The owner of the tobacco shall witness the burning of the waste tobacco and shall sign the report of the BIR Tobacco Inspector or other authorized Internal Revenue Officer, to indicate his conformity to the facts thereto. SECTION 34. Loss of Tobacco Destroyed by Fire or Other Manner . Tobacco (entered in the official register book) burned or otherwise lost inside or outside a warehouse should be immediately reported in writing by the owner to the Commissioner of Internal Revenue in Manila. If in the province, the loss should be reported to the Tobacco Inspection Service, thru the Supervising Tobacco Inspector. An affidavit of the Mayor, Chief of Police, or BIR Collection Agent where the loss occurred shall be attached to the letter of notification. In the event the record books are destroyed, this fact should be stated in the letter. New or revised transcript sheets shall be submitted to the Tobacco Inspection Service before new official register and guia books are issued to the owner in substitution of those lost. If the loss of the tobacco occurs while in transit, affidavits of the carrier and important witnesses should be secured. If the loss is only partial, an inventory shall be made to determine the actual extent of the loss which shall be subtracted from the total tobacco recorded in the register book. The credit entry shall be noted and initiated by a BIR Tobacco Inspector. Upon receipt of the letter, the Supervising or BIR Tobacco Inspector shall immediately investigate the case and submit the necessary report and recommendation to the Commissioner of Internal Revenue, thru the Tobacco Inspection Service. SECTION 35. Dealers to Facilitate Stock-Taking . Wholesale leaf tobacco dealers shall close their books yearly by means of stock-taking on or about the tenth (10th) day of December or such time as the exigencies of the business may warrant. The stock-taking shall be conducted exclusively by the personnel of the Tobacco Inspection Service, with the authorization of the Commissioner of Internal Revenue. Within reasonable limits, all tobacco dealers shall afford to duly authorized BIR Tobacco Inspectors, free of cost to the Government, all labor and other aids, necessary for the prompt and efficient termination of the stock-taking. In no case shall stock-taking be conducted more than once a year unless requested by the dealer or sufficient evidence of violations of these regulations warrants otherwise. Any and all stock-taking shall only be done with the prior knowledge and consent of the Chief of the Tobacco Inspection Service. CHAPTER X Inspection of Leaf and Partially Manufactured Tobacco SECTION 36. (a) Leaf Tobacco . All leaf tobacco harvested in the Philippines, whether removed from the place of origin or not, so long as it is intended for domestic sale or for factory use, shall be inspected and the corresponding inspection fee assessed and collected before transfer, as provided for, and in accordance with, these regulations. In making entry in the L-3 official register book of the tobacco inspected, the inspecting officers shall indicate under the column "Remarks" the amount of inspection fee assessed, official receipt number under which the said inspection fee was paid, and the place and date of payment, and shall authenticate the same with his signature. This provision shall not apply to retail planter dealers (L-5 permittees) who sell their crop directly to consumers within the municipality where the tobacco is produced. (b) Partially Manufactured Tobacco and By-Products . Sales and transfers of partially manufactured tobacco and/or by-products shall only be subject to inspection as provided for, and in accordance with, these regulations. (c) Imported Foreign Tobacco . Likewise, all imported foreign leaf or partially manufactured tobacco consigned to L-3 or L-7 permittees, shall be subject to inspection by the Tobacco Inspection Service in order to determine whether the said imported tobacco is of standard quality for blending purposes as permitted by Philippine Law. The corresponding tobacco inspection fee thereon shall be assessed and collected before removal from customs custody. An application for inspection shall be filed by the importer with the Commissioner of Internal Revenue, thru the Tobacco Inspection Service, at least ten (10) days before actual removal. (d) Shipment Without Prior Inspection . The privilege to ship tobacco in standard and/or export packages without prior inspection shall be subject to the approval of the Philippine Tobacco Board. Upon approval, a permit shall be issued by the Commissioner of Internal Revenue. Unless such a permit a secured, no wholesale leaf tobacco dealer shall remove or ship tobacco without inspection and payment of the inspection fee at the point of shipment. In case of shipment of tobacco without prior inspection, the application for inspection papers must be accomplished by the consignor and shall be attached to the official guia to be presented to the consignee. Within five (5) days after receipt of the shipment of tobacco, the consignee shall pay the corresponding inspection fee on the lot received. It shall be the duty of a consignor to present his application seeking exemption from prior inspection of the leaf tobacco involved to the BIR Tobacco Inspector assigned in the district before removal of the same, and the triplicate copy of the application shall be given to the BIR Tobacco Inspector for record purposes on the shipment. The reverse side of the guia prepared to accompany the shipment shall show the following notation: "Shipped without prior inspection under permit No. ___________, dated ______________, 19__ issued by the Commissioner of Internal Revenue. ___________________ Owner or Manager Date noted ___________ The BIR Tobacco Inspector shall prepare three (3) copies of the order of payment; one to be attached to the application accompanying the shipment for use in paying the tobacco inspection fee, the duplicate copy to be attached to the triplicate copy of the application, and the third copy to be retained by the BIR Collection Agent or Municipal Treasurer. All the applications for shipment of leaf tobacco without prior inspection for the month shall be submitted with the monthly report to the Commissioner of Internal Revenue. SECTION 37. (a) Inspection Fees for Leaf Tobacco , Partially Manufactured Tobacco and Tobacco Products . For inspection made in accordance with these regulations there shall be collected a fee of: one centavo (P0.01) for one kilogram or fraction thereof of leaf tobacco or partially manufactured tobacco, whether locally produced or imported, thirty centavos (P0.30) for each thousand (1,000) cigars or fraction thereof; five centavos (P0.05) for each thousand (1,000) cigarettes or fraction thereof. (b) Movements of Leaf and Partially Manufactured Tobacco . (1) An L-3 permittee may sell or transfer packed leaf tobacco on which an inspection fee has been paid, to another L-3, L-6, L-7 or B-14 (a) without further inspection and permit. (2) An L-3 permittee, who is at the same time holder of an L-6 and/or L-7 permit, may transfer loose leaf or unpacked leaf tobacco from his L-3 to his own L-6 and/or L-7, provided the transfer is done under the supervision of a BIR Tobacco Inspector and the inspection fee on the leaf has been previously paid. (3) An L-3 permittee, who is not at the same time holder of an L-6 and/or L-7 permit, may transfer loose leaf or unpacked tobacco to an L-6 or L-7, provided a permit is previously secured from the Tobacco Inspection Service, the transfer is done under the supervision of a BIR Tobacco Inspector, and the inspection fee is paid prior to the transfer. (4) Leaf tobacco may not be transferred from an L-6 to an L-3 unless both are of the same ownership, except under written authority of the Commissioner of Internal Revenue. An L-6 permittee, who is at the same time the holder of an L-3 permit, may return his leaf tobacco to his L-3 without further inspection and permit. (5) An L-6 permittee may dispose of any and all the by-products of his partially manufactured tobacco, such as stems, siftings, etc.,and/or any partially manufactured tobacco unfit for export, by selling same to an L-7 permittee for use as raw material in the manufacture of tobacco products, provided a permit from the Tobacco Inspection Service is previously secured. Such tobacco must be inspected and the corresponding inspection fee paid before removal except when the tobacco has been previously inspected and the corresponding inspection fee paid. (6) An L-6 permittee can sell any and all of his partially manufactured tobacco to another L-6 permittee without permit, provided the tobacco is for export; the corresponding inspection fee must be paid prior to removal of the tobacco. (7) Provided a written permit is previously obtained from the Tobacco Inspection Service, an L-3 permittee, who is at the same time holder of an L-6 permit, may consign and transfer for purposes of threshing or stripping, leaf tobacco from his L-3 to an L-6 or L-7 not of his own property, as long as the threshed or a stripped tobacco is subsequently returned to the L-6 of the consignor. No inspection fee shall be paid on the transfer of the leaf tobacco to the thresher or stripper; the corresponding inspection fee shall be paid by the thresher or stripper upon returning the partially manufactured tobacco to the consignor. (8) When leaf tobacco on which an inspection fee has been previously paid, is transferred for threshing and/or stripping purposes from an L-3 permittee to an L-6 or L-7 of the same ownership, no further inspection fee need be paid on the transfer. (9) When handstripped or machine-threshed tobacco is consigned and transferred by an L-6 permittee to another L-6 or L-7, even though of different ownership, for reprocessing and the tobacco is subsequently returned to the consigner, no inspection fee need be paid on the transfer. However, if the reprocesses tobacco will not be returned to the consigner, the thresher shall pay the inspection fee thereon. (10) If an L-6 or L-7 permittee sells stripped or threshed tobacco to an L-6 or L-7 not of the same ownership, the inspection fee shall be paid by the seller prior to the transfer. (11) Provided, a written permit is previously secured from the Tobacco Inspection Service, tobacco transferred from an L-3 or an L-6 to another L-6 or L-7 for threshing or reprocessing purposes may be packed in provisional packages when being returned to the owner from the threshing plant. lexlib (c) Application for Inspection . The inspection of leaf and/or partially manufactured tobacco shall be made upon application, in the form of declaration under oath by the person shipping the tobacco, on BIR Form No. 31.61. Said application, while addressed to the Commissioner of Internal Revenue shall be submitted to the BIR Tobacco Inspector in charge at the point of inspection. To insure prompt and accurate inspection, the said application must be submitted at least three (3) days before the scheduled date of shipment. A separate application must be made for tobacco destined to different provinces. A wholesale leaf tobacco dealer may submit at one time all his stocks of leaf tobacco, packed in standard packages, for inspection or re-inspection and pay the corresponding inspection or re-inspection fee even though there may not be immediate sale or shipment contemplated. Guias to be used for the lot inspected shall be prepared only upon the shipment of the tobacco and shall accompany the shipment until the tobacco is actually received by the consignee to whom said guias shall be surrendered. Shipment of Virginia leaf tobacco of wholesale leaf tobacco dealers affiliated with the Philippine Virginia Tobacco Administration (PVTA) shall always be accompanied with application for inspection or re-inspection and the inspection or re-inspection fee must be paid at the place of shipment. (d) Making of Inspection . Unless otherwise provided for in these regulations, only tobacco packed in standard packages shall be inspected. The inspector shall open up a sufficient number of bales selected at random [5 to 10 bales out of every hundred (100) bales will ordinarily suffice] to determine whether the tobacco conforms with the classification and net weight stated in the application and as marked on the bales. In case the classification of any of the tobacco is found to be different from that stated in the application or the tobacco classification fails to meet the requirements hereof as to packing and marking of the bales, the entire lot of tobacco shown in the application shall be rejected until brought within said requirements and submitted for re-inspection. If the tobacco is of a grade lower than that stated in the declaration, it will be considered as having been brought within the requirements of these regulations upon submission of a correct declaration and marking of the bales with the true grade. This shall not be construed as permitting the mixing of tobacco of several grades. Inspection fees shall be collected on each inspection or re-inspection . In case of Virginia leaf tobacco, primary inspection shall be done in the province before shipment to the Redrying Plant where the final classification will be done by the BIR Tobacco Inspector or other authorized Internal Revenue Officer. The official concerned shall open bales selected at random (20 out of every 100 bales) but if upon inspection it is found that the tobacco does not conform with the standard Virginia classification, every bale shall be opened for thorough verification and proper classification. The tobacco offered for inspection must be stored in an accessible place and the person presenting the tobacco for inspection shall supply the labor required in moving the bales to facilitate the desired inspection. CHAPTER XI Partially Manufactured Tobacco and Tobacco Products for Export SECTION 38. Manufactured Products for Exports . (a) Cigars and Cigarettes for Export . Cigars and cigarettes intended for export must be manufactured under sanitary conditions, from good, clean tobacco, properly cured and seasoned and generally grown in the Philippines. In the manufacture of cigars, however, imported wrappers and binders may be used. Filler blends for cigars and/or cigarettes may contain a reasonable percentage of imported tobacco. Hand and machine-made cigars must be well made with clean, long or short filler, free from dust or burnt tobacco and must be provided with a suitable spiral wrapper. In the case of cigars, the filler used must be free from dust and/or musty tobacco. The manager or owner of the factory shall certify under oath that the cigars and cigarettes sought to be inspected and exported had been manufactured at least 10 days before the time of shipment. No cigars and/or cigarettes for export shall be exported or shipped abroad without such certification. (b) Smoking Tobacco , Chewing Tobacco , Snuff Tobacco . These tobacco products must be manufactured under sanitary conditions from good, clean tobacco properly cured and seasoned, generally grown in the Philippines. (c) Partially Manufactured Products . Partially manufactured tobacco shall consist of Philippine grown tobacco as defined under Sec. 2, letter (m) of these regulations with the exception of No. 7 (waste tobacco). SECTION 39. Packing of Partially Manufactured Tobacco and Tobacco Products and Marking of the Containers . (a) Cigars of only one registered brand shall be packed in the same container, except in the case of sample or gift containers. The materials of the container must be wood, tin, appropriate cardboard or an appropriate synthetic material. Prior permission in writing must be secured from the Commissioner of Internal Revenue to use materials other than those mentioned above. Before removal from the factory, the containers must be marked permanently, showing the shape or size of the cigars, date of packing, district where manufactured, schedule, paragraph, assessment number, color and number of cigars. By color is meant the color of the wrapper. The word "claro" (light) shall apply to a light wrapper; "Colorado" to a dark wrapper, "Maduro" (ripe) to a very dark wrapper. Export strip stamps or seals shall be affixed to cigar containers. An official inspection label shall likewise be attached to or its text printed on the cigar container. (b) Cigarettes . Individual packages of cigarettes shall be provided with an official inspection label and the print of the package shall indicate the schedule, paragraph, assessment number as well as the revenue district number. Outside containers shall be marked "For Export" and "Made in the Philippines". (c) Partially Manufactured Tobacco . Bales, hogsheads or other containers for partially manufactured tobacco shall, besides the markings required by the customer, carry the marking "Product of the Philippines" and the contents shall be clearly identified as to the province of origin. (d) Markings of Shipping Containers of Tobacco Products . Tobacco products for export shall be packed in durable shipping containers, clearly marked "For Export" and "Made in the Philippines". Care should be taken by the exporter to comply with the marking requirements of the importing country. (e) Labels or Packages of Tobacco Products Sold to the Armed Forces of the Philippines (AFP and United States Armed Forces (USAF) . Individual containers of cigars and cigarettes sold and delivered to the AFP and/or USAF for actual use or issue by the said armed forces and purchased with funds of the respective Government, shall be provided with export strip stamps or seals in the case of cigars and with official inspection labels in the case of cigarettes. In addition to these, individual cigar containers and the outer cigarette containers must be marked "tax free for exclusive use of the AFP/USAF". SECTION 40. Official Inspection Label and Export Strip Stamps or Seals . (a) Official Inspection Label . The official Inspection Label for cigars shall have the following text: "Republic of the Philippines Passed upon by the Tobacco Inspection Service _______________ made from short/long filler grade tobacco grown in ___________________________". The Official Inspection Label for cigarettes shall have the following text: "PHILIPPINE CIGARETTES Manufactured under Government Supervision and officially graded as standard". lex (b) Export Strip Stamps or Seals . The export strip stamps or seals may be obtained from the Bureau of Internal Revenue upon proper request by the manufacturer and they shall be accounted for in the official register book. Said stamps or seals shall be cancelled on the date of affixture to the containers by the same means used for cancelling tax paid stamps. SECTION 41. Application for Inspection and Manner of Inspection . (a) Application . Application for inspection shall be filed by the manufacturer with the Tobacco Inspection Service at least three (3) days before the scheduled date of shipment of partially manufactured tobacco or tobacco products. In the case of export of partially manufactured tobacco or tobacco products in small quantities for sample purposes, an application for inspection as required in these regulations shall also be filed and the corresponding inspection fee paid. No inspection shall be made more than fifteen (15) days in advance of the intended shipment and in case an inspected shipment is held back in the Philippines more than thirty (30) days after the date of inspection, the applicant shall notify the Commissioner of Internal Revenue, through the Tobacco Inspection Service. A re-inspection fee shall be assessed and collected in such cases. (b) Inspection . If upon inspection, it is found that the partially manufactured tobacco and/or manufactured products of tobacco to be exported do not conform with the specifications promulgated in these regulations or if the products do not conform with the markings on the containers, the entire lot shall be re-inspected after the deficiencies have been corrected. A re-inspection fee shall be assessed and collected for the re-inspection. A sufficient number of containers (five to ten per cent of the entire lot will suffice) shall be opened for inspection by the BIR Tobacco Inspector in the case of partially manufactured tobacco. In case of manufactured tobacco products, a lower quantity shall suffice except if there exists reasonable doubt that the tobacco products submitted for inspection cannot be considered standard for export. (c) Considerations in Making Inspections . In determining the quality of the cigars and cigarettes to be exported, the workmanship, burning quality and the price at which the products will be sold shall be given due weight; if it is found that the cigars and/or cigarettes are sold at a price which does not reasonably conform with the workmanship and the tobacco used, such evidence may be used as grounds for a more thorough inspection or even a rejection of the lot. SECTION 42. Export Shipment . (a) Notice of Export Shipment . Any manufacturer who intends to export manufactured products of tobacco shall prior to the exportation, notify the Commissioner of Internal Revenue, thru the Tobacco Inspection Service, of the intended removal, giving the serial number of the export strip stamps or seals to be used in the consignment. The discovery of any such articles in transit in regard to which no notification has been received shall be deemed prima facie evidence of the illegal removal of the same and shall subject the manufactured products of tobacco to forfeiture. (b) Delivery Direct to Ship Side or Authorized Exporter's Warehouses . All manufactured products of tobacco removed non-taxpaid for export shall be sent direct, without being mixed with containers of similar articles for domestic consumption, from the factory to the carrier or to the warehouse of the exporter. If a bonded warehouse is to be used, a permit for storage must be previously obtained from the Commissioner of Internal Revenue. (c) Proof of Exportation . Exporters of manufactured products of tobacco subject to specific tax if sold or removed for consumption in the Philippines are required by law to submit proof of exportation satisfactory to the Commissioner of Internal Revenue. Proof of exportation will not be deemed satisfactory unless submitted within thirty (30) days from the date the goods are removed from factory, except when the manufacturer submit proof that the articles are still being held for exportation. The following certification shall be placed on the shipping documents: "_____________________ Philippines (Port of loading) _________________________, 19__ I hereby certify that this shipment is composed of ____________________ of Factory A ____________________ removed on _______________ 19___ Serial Numbers ______ to _________. _____________________ Signature of Exporter" If the goods are from different factories, the certification shall show the quantity removed from each factory together with the date of removal. In case the goods are moved to a warship stationed in Philippine waters, a certification attested by the proper ship officer shall be accepted by the Commissioner of Internal Revenue as proof of export. The certification shall contain the above required data and further state that the ship was under sailing orders, that the tobacco products were part of the stores intended for consumption on the high seas or in foreign ports, and that none of the said articles were intended for consumption in Philippine waters. If proof of the exportations is not submitted to the Commissioner of Internal Revenue within thirty (30) days after the removal of the tobacco products from the factory, the Chief of the Tobacco Inspection Service shall immediately recommend to the Commissioner of Internal Revenue that the exporter be required to pay the specific tax thereon. SECTION 43. Tobacco Exempted from Specific Tax . No specific tax shall be collected on the following: (a) Leaf tobacco and partially manufactured tobacco, except imported leaf tobacco, unless entered in the L-7 official register book. (b) Manufactured products of tobacco for export and/or use by the Armed Forces of the Philippines or the United States Armed Forces, and other entities specifically exempted by law. SECTION 44. Return of Rejected Tobacco by Foreign Buyers . Whenever partially manufactured tobacco or manufactured products of tobacco are rejected by the foreign importer for any reason whatsoever, the domestic exporter may be allowed to have the entire shipment or part thereof returned to the Philippines, free of tax and duties, provided that a certification issued by the authorized representative of the Republic of the Philippines concerned, attesting that the shipment is to be returned is of Philippine origin, is submitted. In the case of rejected leaf tobacco, the same provision shall apply. CHAPTER XII Instructions to the Tobacco Inspectors or Other Authorized Internal Revenue Officer SECTION 45. Lifting Guias, Checking Consignments, Difference Shown by Guia and Advise Slip . (a) The Supervising Tobacco Inspector, BIR Tobacco Inspector or other authorized Internal Revenue Officer shall, at the first opportunity after receipt of the advice slips (BIR Form No. 31.49),call upon the consignee shown thereon and compare the advice slip against the official guia when not yet lifted or against the official register book when the guias have been lifted. If any discrepancy is found, the tobacco actually received shall be debited in the proper account of the consignee, the discrepancy ascertained as far as possible, and the official guia lifted and forwarded together with a special report in detail with recommendations to the Commissioner of Internal Revenue. If no discrepancy is discovered, the entries in the official register book of the consignee shall be initialed by the BIR Tobacco Inspector, who shall indicate thereon that no discrepancy was found. The guia shall then be lifted and filed with the Tobacco Inspection Service for a period of five (5) years, at the end of which time they may be destroyed. After all the official guias have been lifted and the advice slips annotated, the Supervising Tobacco Inspector or another authorized Internal Revenue Officer shall forward the advice slips to the Tobacco Inspection Service. All advice slips addressed to Manila and suburbs shall be forwarded to the Tobacco Inspection Service, for verification. (b) When Consignee Cannot be Located, has not Received the Shipment of Tobacco or Denies Transaction . Should the Supervising Tobacco Inspector BIR Tobacco Inspector or other authorized Internal Revenue Officer be unable to locate an alleged consignee, or should a consignee named in an advice slip fail to receive the leaf tobacco in due time, or should the tobacco dealer deny any knowledge of the transaction, the said official shall make a thorough investigation of the case and make a full report with appropriate recommendations to the Commissioner of Internal Revenue. SECTION 46. Issuance of Inspection Certificate (Order of Payment) and Collection of Fees . After completing an inspection of tobacco, the BIR Tobacco Inspector shall issue an inspection certificate on BIR Form No. 3.78, which shall be prepared and issued in triplicate. The original certificate shall be delivered to the person presenting the tobacco for inspection to be brought to the BIR Collection Agent, or Municipal Treasurer in the locality where no BIR Collection Agent is assigned, to pay the corresponding tobacco inspection fees; one copy shall be attached to the monthly report of the BIR Tobacco Inspector and one copy shall be retained by said inspector. If the inspection of tobacco is done in Manila, under special permit approved by the Tobacco Board, the inspection fee shall be paid not later than five (5) days after the actual delivery of the tobacco to the consignee. The BIR Tobacco Inspector shall inspect the tobacco within a three (3) day period upon actual delivery of the tobacco to the purchaser. It shall be the duty of the BIR Tobacco Inspector to see that all papers relative to the particular inspection shall be properly completed and signed after inspection of the tobacco. The inspecting officer shall see that the fees are paid on time [within five (5) days from the date of inspection or re-inspection] and in case of default, to demand additional payment of 25% of the fees as compromise. In the event of failure of settlement, the matter should be reported to the Commissioner of Internal Revenue or to the Tobacco Inspection Service. All fees due on inspection of leaf tobacco, partially manufactured tobacco and/or manufactured products of tobacco for domestic consumption or for export as provided for in Section 302 of Commonwealth Act No. 466, as amended, shall be paid to the nearest BIR Collection Agent or, to the Municipal Treasurer designated as ex-office Collection Agent. Every payment shall be acknowledged by the issuance of a Revenue Official Receipt (BIR Form No. 25.24), and no payment shall be recognized unless an official receipt is presented as evidence thereof. Tobacco inspection fees shall be treated as a special fund and shall be accounted, and remitted to the Treasurer of the Philippines, in the same manner as all other revenue collections. A monthly abstract of collections for inspection fees (1-F-38) and compromises and penalties (1-F-24) shall be prepared by the collecting officer to be submitted to the Commissioner of Internal Revenue, Attention: Chief, Tobacco Inspection Service, BIR, Manila, not later than the 10th day of the month next following. The abstract shall state the name of the taxpayer, the official receipt number, dated issued and the amount paid. Note: Schedule and paragraph I-F-38 should be I-F-38) per Gen. Circular No. Schedule and Paragraph I-F-24 should be 1-F-24) V-27 dated Oct. 29, 1946. All inspection fees collected in accordance with the foregoing shall we accounted for under "I-F-38" which shall invariably be indicated on the official receipt issued by the Collecting Officer, while all fines and compromises collected shall be accounted for under account "I-F-24". All BIR Tobacco Inspectors and other authorized Internal Revenue Officers, shall be provided with the necessary forms (BIR Form No. 31.76) by the National Office of the Bureau of Internal Revenue upon receipt of the necessary requisition therefor. In any district where a BIR Tobacco Inspector is assigned, no other Internal Revenue Officer shall inspect leaf tobacco, partially manufactured tobacco and/or manufactured products of tobacco whether for domestic use or for export. All applications shall be referred to the BIR Tobacco Inspector or to the Supervising Tobacco Inspector assigned in the district. Only in the absence of the above-mentioned officers shall other revenue officers be authorized by the Commissioner of Internal Revenue in writing to perform the duties of BIR Tobacco Inspector. SECTION 47. Action to be Taken by Officers to Whom Tobacco Losses are Reported . BIR Tobacco Inspectors or other authorized Internal Revenue Officer to whom any loss of leaf tobacco is reported shall, if practicable, at once proceed to the place where the loss occurred; investigate the circumstances of the case and require evidence under oath from such persons as may have any knowledge regarding the matter. In case of total loss, he shall address a detailed report in triplicate to the Commissioner of Internal Revenue, stating the quantity of tobacco reported in the guia and attach thereto the official guia or photostatic copy of same, or if the guia is also lost, a Certificate of Lost Guia. Upon completion of his investigation, the Supervising or BIR Tobacco Inspector or other authorized Internal Revenue Officer shall make in the official register book a red ink credit entry covering the loss and initial it. If the loss sustained in transit is only partial, the official concerned shall make the full debit entry in the consignee's register book but at the same time make also a credit entry in red ink for the portion lost, explaining the cause under the column "Remarks". Entries regarding total losses of consignments, and losses suffered by manufacturers of tobacco products shall only be made after the receipt of appropriate instructions from the Commissioner of Internal Revenue. The official shall make a synopsis of the matter on the "index and delinquency record" (BIR Form No. 409) placed in the back part of the official register book (BIR Form No. 31.46),and affix thereto his signature. He shall also require the owner or manager to initial the same. SECTION 48. Stock-Taking Reports . No stock-taking in wholesale leaf tobacco dealer's establishments shall be made without written authority issued by the Commissioner of Internal Revenue or the Chief of the Tobacco Inspection Service, except in special urgent cases when the nature of the discrepancies found by the Chief of the Tobacco Inspection Service or the Supervising Tobacco Inspector in the field, demands immediate stock-taking to protect the interests of the Government. In such cases, the Commissioner of Internal Revenue or the Chief to the Tobacco Inspection Service shall be notified immediately; otherwise, a prior written authority from the Commissioner of Internal Revenue of the Chief of the Tobacco Inspection Service should invariably be secured. The Supervising or BIR Tobacco Inspector shall cause stock to be taken in the establishment of leaf tobacco dealers as stated hereof and at the completion of the stock-taking, a summary shall be written at the bottom of the last entries in red ink in the dealers official register book to show the results of the stock-taking in future checking. The report of the stock-taking by the official concerned shall be so prepared as to clearly show any overage, shortage, shrinkage, and violation of these regulations, and should include appropriate recommendations, as follows: Stock-taking Report Bales Bales Total Weight of Packed Tob. 50's 115's Baled Loose Total Stock as of ______,: 19___ ______________________________________________ Plus Total Purchased ______________________________________________ Total Stock Handled ______________________________________________ Add: Baled Tobacco transferred from Loose Leaf ______________________________________________ Total Bales & Loose Leaf Handled ______________________________________________ Less: Total Removals ______________________________________________ Book Balance, ______________________________________________ Inventory ______________________________________________ Physical count ______________________________________________ Shortage, Overage ______________________________________________ Shrinkage Violations of the regulations found ______________________________________________ ________________________________________________________________ ________________________________________________________________ RECOMMENDATION_______________________________________________ ________________________________________________________________ ________________________________________________________________ ____________________ _____________________ Owner/Manager Tobacco Inspector SECTION 49. BIR Tobacco Inspectors or Other Authorized Internal Revenue Officers to Initial Entries in Register Book . A BIR tobacco inspector or other authorized Internal Revenue Officer shall initial both the credit and debit entries, check or verify the official register book BIR (Form No. 31.46) and perform the duties required of them by these regulations. SECTION 50. Privilege Tax Receipt . BIR Collection Agents or Municipal Treasurers shall keep records of all paid semestral or annual fixed taxes and compromises effected by wholesale leaf tobacco dealers and retail leaf tobacco dealers in their locality, and of permits of tobacco planters selling to consumers issued by them. These records shall remain in their possession until called for by the Commissioner of Internal Revenue by the Chief of the Tobacco Inspection Service. SECTION 51. BIR Forms Prescribed for Use in Connection with these Regulations . BIR Form No. 11 Retail Leaf Tobacco Dealer's Tax Receipt BIR Form No. 31.46 Official Register Book for L-3 Permit holders BIR Form No. 31.46 (a) Official Register Book for L-6 Permit holder BIR Form No. 31.47 Transcript Sheet BIR Form No. 31.48 Official Guia Book for wholesale leaf tobacco dealer BIR Form No. 31.49 Advice Slip BIR Form No. 31.78 Order of payment of tobacco inspection fees BIR Form No. 275 Permit for Planter-Dealer of leaf tobacco BIR Form No. 396 Internal Revenue Tobacco Inspector's Report BIR Form No. 409 Index and Delinquency Record (to be placed on the inner back cover of the official register book) BIR Form No. 545 Certificate of Lost Guia Stock-taking Report SECTION 52. Verification , Interception and Violations of Tobacco Regulations Performed by Other Government Agencies or BIR Officers Enforcing Other BIR Regulations on L-3 , L-3F , L-3R , L-4 , L-5 and L-6 Permit Holders Under Act No . 2613 , as Amended . All cases of verification, interceptions, apprehensions, and enforcement of Tobacco Law and Revenue Regulations of wholesale leaf tobacco dealers by other Government agencies of the Republic of the Philippines or other BIR Officers enforcing BIR regulations promulgated under Act No. 2613, as amended, shall immediately report such cases of verifications, interceptions and violations of the tobacco revenue regulations to the Commissioner of Internal Revenue (who is at the same time the ex-officio Chairman of the Philippine Tobacco Board), thru the Chief of the Tobacco Inspection Service for proper evaluation and appropriate action on the case. SECTION 53. Appeals . If any person feels aggrieved at the classification and grading of any lot of leaf or partially manufactured tobacco made by a BIR Tobacco Inspector, he may appeal to the officer immediately superior to one making the inspection. To perfect an appeal the party aggrieved the tobacco inspection fee due on account of the inspection from which the appeal is made and in addition, deposit with the BIR Collection Agent concerned an amount equal to such inspection fee. The appellant shall file with the inspecting officer within five (5) days from the date of inspection a written statement stating his dissent from the inspectors' decision and setting forth his grounds therefor. The inspector shall forthwith transmit the papers to his immediate superior with his comments, whereupon the latter shall proceed to re-appraise the tobacco products, giving the inspector and the appellant a hearing if such action is deemed necessary. If the decision of the BIR Tobacco Inspector is reversed by his immediate superior or if upon appeal the decision of the immediate superior is reversed by the Commissioner of Internal Revenue, the deposit shall be refunded, provided, however, that the Commissioner of Internal Revenue or his duly authorized representative may order another re-inspection of any lot of tobacco if in his opinion such re-inspection is warranted. In case the appellant desires to forward his tobacco or manufactured tobacco products of tobacco to Manila without awaiting the decision of the local officer appealed to, the appeal may be transferred to Manila. SECTION 54. Enforcement . Section 14 of Act No. 2613, specifies that the Commissioner of Internal Revenue is the executive officer charged with the enforcement of the provisions of said Act and of the regulations issued in accordance therewith; but the Director of the Bureau of Plant Industry is charged with the execution and enforcement of the provisions of law referring to the cultivation and production of high quality tobacco. Internal Revenue Officers will bear in mind that the work pertaining to the securing of seed and demonstration work among tobacco planters as to proper cultivation methods belongs to the Director of the Bureau of Plant Industry, and the Internal Revenue Officer concerned shall take part in the work only when delegated to do so by the Director of the Bureau of Plant Industry, with the approval of the Commissioner of Internal Revenue. The BIR Tobacco Inspector and any other internal revenue officer designated by the Commissioner of Internal Revenue shall enforce the provisions of law relating to tobacco after it has been cured or flue-cured. They will accordingly see to it that the prohibitions against improper curing, flue-curing, fermenting, baling of leaf tobacco, grading, classification and removal, including illicit traffic thereof, are properly complied with and shall perform such other duties in connection with the movements of leaf tobacco after it is gathered, as may be required of them under these regulations or by order from their superior officers. cdlex SECTION 55. Penalties . Any person who shall export or attempt to export from the Philippines to foreign countries, any tobacco that has not undergone inspection as required by these regulations and any person who shall knowingly violate any other provisions of Act No. 2613, as amended, or any rules, regulations or any other applicable provisions of the National Internal Revenue Code herein promulgated, will be proceeded against under Section 14 of Act No. 2613, which provides punishment by a fine not exceeding Five Hundred Pesos (P500.00) or by imprisonment not exceeding six (6) months, or by both penalties, in the discretion of the court. SECTION 56. Repealing Clause . All administrative orders, general circulars, rules and regulations inconsistent herewith are hereby repealed or modified accordingly. SECTION 57. Date of Effectivity . These regulations shall take effect upon publication in the Official Gazette. (SGD.) EDUARDO Z. ROMUALDEZ Secretary of Finance Recommended by: MISAEL P. VERA Commissioner of Internal Revenue ATTACHMENT 1st Indorsement January 10, 1972 Respectfully returned to the Assistant to the Commissioner, B.I.R.,Manila, the within proposed Revenue Regulations amending Sections 7(f) and 36(b)(1) of Revenue Regulations No. 17-67, otherwise known as the Revenue Tobacco Inspection Regulations with the information that after a review of the proposal, the same appears to be in order, hence, this Department concurs with the proposals. liblex PRISCILLA R. GONZALES Revenue Operations Head (Legal)