McClintock

L. H. McClintock and Florence L. McClintock, copartners, doing business as the McClintock Display Company, appeal from a judgment of the district court, denying them a recovery of taxes paid in accordance with an alleged illegal assessment of manufacturers’ sales taxes. The taxes were levied in March of 1943 by the Commissioner of Internal Revenue for the thirteen months’ period from October 1, 1941, to October 31, 1942, inclusive. The taxes as levied were paid, and a claim for refund had been made and rejected.

The taxpayers operate a business in which they manufacture decorative trimmings made in part of rubber, simulating fresh parsley. The trimmings are used in meat markets and similar establishments in decorating displays of meat. The taxpayers entered into agreements with their customers, entitled “Rental Agreement” 1 to let their products to their customers for limited periods, and in connection therewith to render certain services in the replacement or renovation of soiled or damaged trimmings. The service usually called for a replacement of 50% of all the trimmings approximately every sixty days.

The manufacturer’s excise taxes imposed and due on the transactions were…