The opinion of the court was delivered by: LINDBERG
LINDBERG, District Judge.
This is an action for the recovery of excise taxes paid by K-W Dart Truck Co. on the sale of certain vehicle parts. The parts in question were purchased by K-W Dart Truck Co. from the original manufacturers and resold by K-W Dart for eventual use as replacement parts on off-highway vehicles manufactured by K-W Dart. At least 95% of these parts were actually used as replacement parts on K-W Dart off-highway vehicles.
Section 4061(b)(1) of the Internal Revenue Code of 1954 imposes a tax on the sale by the manufacturer of parts or accessories for automobile truck chassis and bodies.
Section 4221(a)(1) provides that no tax under Section 4061(b)(1) shall be imposed on the sale by the manufacturer of an article for use by the purchaser for further manufacture. Section 4221(d)(6) provides that a part or accessory taxable under Section 4061(b)(1) shall be treated as sold for use in further manufacture if it is sold for use by the purchaser as material in the manufacture or production of, or as a component part of, another article to be manufactured or produced by him.
Section 4223(a) provides that a manufacturer, such as K-W Dart Truck Co., to whom an article is sold free of tax under Section 4221(a)(1) for use by him in further manufacture shall be treated as the manufacturer of such article.
The substance of the above sections as applied to the facts in this case is to be construed as follows:
If the parts in question here are parts or accessories for automobile truck chassis and bodies, K-W Dart Truck Co., having purchased them tax-free under Section 4221(a)(1) for use in further manufacture,
must now be treated as their manufacturer. As such, K-W Dart would be liable for tax on the resale of the parts to its dealers.
Having paid the tax on the articles in question, K-W Dart can now get a refund only by meeting its burden of showing that the articles in question were not taxable, that is, that they are not parts or accessories for automobile truck chassis and bodies, within the meaning of the statute.
It is thus necessary to explore the meaning of the term "parts or accessories for automobile truck chassis and bodies" under the statute.
"Parts or accessories" is defined in Section 48.4061(b)-2(a) and (b) of Treasury Regulations on Manufacturers and Retailers Excise Tax (1954 Code). As there defined, the term includes all articles "the primary use of which is to improve, repair, replace, or serve as a component part of an automobile truck or bus chassis or body," but does not include "articles which are not used primarily in the manufacture, repair, etc., of automobile trucks, . . . but have a general use in the manufacture, repair, etc., of various articles."
The government states in its brief that "this rule is consonant with the Supreme Court decision in Universal Battery Co. v. United States, 281 U.S. 580, 74 L. Ed. 1051, 50 S. Ct. 422 (1930), where the Court approved the interpretation of the term 'part' in the Excise Tax Regulations and stated (p. 584):
'It is that articles primarily adapted for use in motor vehicles are to be regarded as parts or accessories of such vehicles, even though there has been some other use of the ...