1 Report, p. 9.

Benzene, aniline, bone oil, turpentine, petroleum-ether, and pyridine are among the most frequently used denaturants other than wood naphtha.

The general principles upon which the authorities administer the important enactment in question are explained in a minute issued by the Board of Inland Revenue in July, 1902, and quoted in an appendix to the evidence given before the Industrial Alcohol Committee. After giving the terms of the Act, the minute (slightly abridged here) proceeds: -

"It is in the first place to be observed that the privilege of using spirit duty-free, as contemplated by the section, is to be a personal privilege, entailing personal obligations on the person or persons to whom it is granted. It follows from this that there can be no question of the Board's granting any general authority under the section to classes of persons, but that each person or body of persons who desires to obtain the benefit of the section must make separate application to the Board, who will consider all the circumstances of each separate application, and form their judgment upon them.

'At the same time ... it may be possible to indicate certain classes of cases to which the benefit of the section could not, in any circumstances, be conceded.

"Before the use of duty-free spirit can be authorised, two main conditions must be fulfilled, viz.: -

"(a) It must be proved, to the satisfaction of the Commissioners, that the use of methylated spirit is unsuitable or detrimental for the particular purpose; and

"(b) The security of the revenue must be guaranteed by such means as the Commissioners may require.

"These conditions are cumulative, not alternative. Unless both can be fulfilled, there can be no question of a grant of the authority contemplated by the section. In every case, therefore, it will be necessary to scrutinise the objections that may be alleged to the use of methylated spirit, and it is only after the validity of such objections has been admitted that it will be necessary to proceed to consider whether, or by what means, the security of the revenue can be guaranteed.

"It was explicitly stated in the House of Commons . . . that the Commissioners should exercise the discretion conferred upon them with great caution and with a very strict regard to the security of the revenue; and the Board themselves feel that no other attitude would be possible for them.

"They intend, therefore, to insist on a strict observance of the prescribed conditions in every case in which they may grant an authority under the section, and they will not hesitate to reject any application in respect of which it appears to them that the conditions are not, or cannot be, adequately complied with.

"Further, as the duty on spirit is so heavy, they consider that they may properly require that the advantage to be obtained by the use of duty-free spirit should be substantial, and that the benefit of the section should not be accorded in cases of trivial importance or in the purely personal interests of individuals.

"In accordance with these principles, the Board will refuse to entertain applications: (a) Where the use of methylated spirit is attended by only slight and immaterial disadvantage; (b) Where the security of the revenue cannot be guaranteed with reasonable certainty, and at reasonable cost of convenience to the department.

"It is manifest that there must be many cases in which the protection of the revenue would be impossible, if the use of dutyfree spirit were permitted, and of these there may be mentioned the following: -

"(i) The manufacture of articles intended for human consumption, such as medicines, tinctures, and essences.

"(ii) The manufacture of articles not intended for human consumption, but capable of being so used, if made with pure spirit or with spirit only temporarily rendered unpotable, such as perfumes or spirituous mixtures for purposes of illumination or of generation of heat or motive power.

"As regards cases to which the benefits of the section may be extended, the Board may say generally that they will be disposed to entertain favourably applications: -

"(1) From recognised bodies formed for the advancement of science, or of scientific education, and requiring the use of pure spirit in processes of research or of illustration. . . .

"(2) From persons engaged in an industrial enterprise of such magnitude and importance as to give it a character of public interest in its bearing upon national trade. In any such case the concession will commonly be made subject to an obligation to render the spirit unpotable before and during use, by such means as may be found to be most appropriate to the particular circumstances of the manufacture."

In accordance with these principles, a considerable quantity of specially-denatured spirit (about three-quarters of a million proof gallons in the year 1913-14) is authorised for use in certain manufactures. Explosives, dyestuffs, celluloid products, and various fine chemicals are the chief substances for the making of which this form of duty-free alcohol is required. Persons wishing to obtain authority to receive supplies should in the first instance refer to the local Surveyor of Customs and Excise, who will give any information that may be necessary.

Methyl alcohol, if of sufficient purity to be classed as "potable," is liable to duty at the same rate as ethyl alcohol, though it is exempted from the "surtax" on importation. Previously to July, 1918, it was allowed for use free of duty under Section 8 of the Finance Act, 1902, on similar lines to those adopted for ethyl alcohol, except that, in accordance with a recommendation of the Industrial Alcohol Committee, it was treated more leniently in the matter of denaturing.

Since the date mentioned, the use of methyl alcohol has been made still more free to manufacturers. It is now allowed with fewer restrictions, and in general without denaturing, for making fine chemicals, under regulations similar in the main to those governing the receipt and use of industrial methylated spirit. The purposes for which it is required must be duly specified to, and approved by, the Commissioners of Customs and Excise. For use in beverages or spirituous perfumes the receipt of methyl alcohol is, of course, not allowed; and the authorities must be satisfied that industrial methylated spirit is unsuitable or detrimental for the purposes in question.