Rev. Ruling 57-74

Revocation of Basic Permit

Section 4 of the Federal Alcohol Administration Act provides that a basic permit shall, after due notice and opportunity for hearing, be revoked if it is found that the permittee has not engaged in the operations authorized by the permit for a period of more than two years. The term "operations" as used therein, with respect to a distiller's basic permit, includes both the production of distilled spirits and the sale of the spirits produced under the permit. Accordingly, if the holder of a distiller's basic permit has not engaged in distilling operations for more than two years, but holds title to distilled spirits of his own production still remaining in a warehouse, his permit would not be subject to revocation because of inactivity so long as he was engaged in disposing of such spirits. Distiller's basic permit held by a non-operating owner of a registered distillery would be subject to revocation, provided such permittee not only had not operated his distillery but had not held title to spirits of his own production for two years. Since a distiller's basic permit is not required to authorize the ownership of distillery premises operated under lease by another permittee, the permit of the owner of the distillery premises is subject to revocation if he did not produce or have on hand distilled spirits of his own production within a two-year period not withstanding the operation of the distillery by a lessee within that period.

26 U.S.C. 7805; 27 CFR 200.45