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INTERNAL REVENUE CODE OF 1954 (H) In the case of gasoline, used in production of special motor fuels referred to in section 4041(b). (3)

TAX-PAID ARTICLES USED FOR FURTHER MANUFACTURE.—

If the tax imposed by chapter 32 has been paid with respect to the sale of— (A) Any article (other than a tire, inner tube, or automobile radio or television receiving set taxable under section 4141) purchased by a manufacturer or producer and used by him as material in the manufacture or production of, or as a component part of, an article with respect to which tax under chapter 32 has been paid, or which has been sold free of tax by virtue of section. 4220 or 4224, relating to tax-free sales; (B) Any article described in sections 4142 and 4143 (b) purchased by a manufacturer or producer and used by him as material in the manufacture or production of, or as a component part of, communication, detection, or navigation receivers of the type used in commercial, military, or marine installations if such receivers have been sold by him to the United States for its exclusive use; such tax shall be deemed an overpayment by such manufacturer or producer. (c) C R E D I T FOR T A X P A I D ON T I R E S, I N N E R T U B E S, RADIOS OR TELEVISION RECEIVING SETS.—If tires, inner tubes, or automobile

radio or television receiving sets on which tax has been imposed under chapter 32 are sold on or in connection with, or with the sale of, an article taxable under section 4061(a) (relating to automobiles, trucks, etc.), there shall (under regulations prescribed by the Secretary or his delegate) be credited, without interest, against the tax under section 4061 an amount equal to, in the case of an article taxable under paragraph (1) or (2) of subsection (a) of section 4061, the applicable percentage rate of tax provided in such subsections— (1) Of the purchase price (less, in the case of tires, the part of such price attributable to the metal rim or rim base) if such tires or inner tubes were taxable under section 4071 (relating to tax on tires and inner tubes) or, in the case of automobile radio or television receiving sets, if such sets were taxable under section 4141; or (2) If such tires, inner tubes, or automobile radio or television receiving sets were taxable under section 4218 (relating to use by manufacturer, producer, or importer), then of the price (less, in the case of tires, the part of such price attributable to the metal rim or rim base) at which such or similar tires, inner tubes, or sets are sold, in the ordinary course of trade, by manufacturers, producers, or importers thereof, as determined by the Secretary or his delegate. (d)

MECHANICAL PENCILS TAXABLE AS J E W E L R Y. — I f any

article,

on the sale of which tax has been paid under section 4201, is further manufactured or processed resulting in an article taxable under section 4001, the person who sells such article at retail shall, in the computation of the retailers' excise tax due on such sale, be entitled to a credit or refund, without interest, in an amount equal to the tax paid under section 4201. (e) R E F U N D TO EXPORTER OR S H I P P E R. — Under regulations prescribed by the Secretary or his delegate the amount of any tax imposed § 6416(b)(2)(H)

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