26 U.S.C. § 4662 — Definitions and special rules

Page 2997 TITLE 26—INTERNAL REVENUE CODE § 4662 ‘‘(B) WAIVER OF STATUTE OF LIMITATIONS.—If on the date of the enactment of this Act [Oct. 17, 1986] (or at any time within 1 year after such date of enactment) refund or credit of any overpayment of tax resulting from the application of subparagraph (A) is barred by any law or rule of law, refund or credit of such over- payment shall, nevertheless, be made or allowed if claim therefor is filed before the date 1 year after the date of the enactment of this Act. ‘‘(C) XYLENE TO INCLUDE ISOMERS.—For purposes of this paragraph, the term ‘xylene’ shall include any isomer of xylene whether or not separated. ‘‘(3) INVENTORY EXCHANGES.— ‘‘(A) IN GENERAL.—Except as otherwise provided in this paragraph, the amendment made by subsection (f) [amending section 4662 of this title] shall apply as if included in the amendments made by section 211 of the Hazardous Substance Response Revenue Act of 1980 [Pub. L. 96–510, enacting this chapter]. ‘‘(B) RECIPIENT MUST AGREE TO TREATMENT AS MANU- FACTURER.—In the case of any inventory exchange be- fore January 1, 1987, the amendment made by sub- section (f) shall apply only if the person receiving the chemical from the manufacturer, producer, or im- porter in the exchange agrees to be treated as the manufacturer, producer, or importer of such chemical for purposes of subchapter B of chapter 38 of the In- ternal Revenue Code of 1986. ‘‘(C) EXCEPTION WHERE MANUFACTURER PAID TAX.—In the case of any inventory exchange before January 1, 1987, the amendment made by subsection (f) shall not apply if the manufacturer, producer, or importer treated such exchange as a sale for purposes of sec- tion 4661 of such Code and paid the tax imposed by such section. ‘‘(D) REGISTRATION REQUIREMENTS.—Section 4662(c)(2)(B) of such Code (as added by subsection (f)) shall apply to exchanges made after December 31, 1986. ‘‘(4) EXPORTS OF TAXABLE SUBSTANCES.—Subclause (II) of section 4662(e)(2)(A)(ii) of such Code (as added by this section) shall not apply to the export of any taxable substance (as defined in section 4672(a) of such Code) before January 1, 1989. ‘‘(5) SALES OF INTERMEDIATE HYDROCARBON STREAMS.— ‘‘(A) IN GENERAL.—Except as otherwise provided in this paragraph, the amendment made by subsection (g) [amending section 4662 of this title] shall apply as if included in the amendments made by section 211 of the Hazardous Substances Response Revenue Act of 1980. ‘‘(B) PURCHASER MUST AGREE TO TREATMENT AS MAN- UFACTURER.—In the case of any sale before January 1, 1987, of any intermediate hydrocarbon stream, the amendment made by subsection (g) shall apply only if the purchaser agrees to be treated as the manufac- turer, producer, or importer for purposes of sub- chapter B of chapter 38 of such Code. ‘‘(C) EXCEPTION WHERE MANUFACTURER PAID TAX.—In the case of any sale before January 1, 1987, of any in- termediate hydrocarbon stream, the amendment made by subsection (g) shall not apply if the manu- facturer, producer, or importer of such stream paid the tax imposed by section 4661 with respect to such sale on all taxable chemicals contained in such stream. ‘‘(D) REGISTRATION REQUIREMENTS.—Section 4662(b)(10)(C) of such Code (as added by subsection (g)) shall apply to exchanges made after December 31, 1986.’’ EFFECTIVE DATE Subchapter effective Apr. 1, 1981, see section 211(c) of Pub. L. 96–510, set out as a note under section 4611 of this title. § 4662. Definitions and special rules (a) Definitions For purposes of this subchapter— (1) Taxable chemical Except as provided in subsection (b), the term ‘‘taxable chemical’’ means any sub- stance— (A) which is listed in the table under sec- tion 4661(b), and (B) which is manufactured or produced in the United States or entered into the United States for consumption, use, or warehousing. (2) United States The term ‘‘United States’’ has the meaning given such term by section 4612(a)(4). (3) Importer The term ‘‘importer’’ means the person en- tering the taxable chemical for consumption, use, or warehousing. (4) Ton The term ‘‘ton’’ means 2,000 pounds. In the case of any taxable chemical which is a gas, the term ‘‘ton’’ means the amount of such gas in cubic feet which is the equivalent of 2,000 pounds on a molecular weight basis. (5) Fractional part of ton In the case of a fraction of a ton, the tax im- posed by section 4661 shall be the same frac- tion of the amount of such tax imposed on a whole ton. (b) Exceptions; other special rules For purposes of this subchapter— (1) Methane or butane used as a fuel Under regulations prescribed by the Sec- retary, methane or butane shall be treated as a taxable chemical only if it is used otherwise than as a fuel or in the manufacture or pro- duction of any motor fuel, diesel fuel, aviation fuel, or jet fuel (and, for purposes of section 4661(a), the person so using it shall be treated as the manufacturer thereof). (2) Substances used in the production of fer- tilizer (A) In general In the case of nitric acid, sulfuric acid, ammonia, or methane used to produce am- monia which is a qualified fertilizer sub- stance, no tax shall be imposed under sec- tion 4661(a). (B) Qualified fertilizer substance For purposes of this section, the term ‘‘qualified fertilizer substance’’ means any substance— (i) used in a qualified fertilizer use by the manufacturer, producer, or importer, (ii) sold for use by any purchaser in a qualified fertilizer use, or (iii) sold for resale by any purchaser for use, or resale for ultimate use, in a quali- fied fertilizer use. (C) Qualified fertilizer use The term ‘‘qualified fertilizer use’’ means any use in the manufacture or production of fertilizer or for direct application as a fer- tilizer. (D) Taxation of nonqualified sale or use For purposes of section 4661(a), if no tax was imposed by such section on the sale or Page 2998 TITLE 26—INTERNAL REVENUE CODE § 4662 use of any chemical by reason of subpara- graph (A), the first person who sells or uses such chemical other than in a sale or use de- scribed in subparagraph (A) shall be treated as the manufacturer of such chemical. (3) Sulfuric acid produced as a byproduct of air pollution control In the case of sulfuric acid produced solely as a byproduct of and on the same site as air pollution control equipment, no tax shall be imposed under section 4661. (4) Substances derived from coal For purposes of this subchapter, the term ‘‘taxable chemical’’ shall not include any sub- stance to the extent derived from coal. (5) Substances used in the production of motor fuel, etc. (A) In general In the case of any chemical described in subparagraph (D) which is a qualified fuel substance, no tax shall be imposed under section 4661(a). (B) Qualified fuel substance For purposes of this section, the term ‘‘qualified fuel substance’’ means any sub- stance— (i) used in a qualified fuel use by the manufacturer, producer, or importer, (ii) sold for use by any purchaser in a qualified fuel use, or (iii) sold for resale by any purchaser for use, or resale for ultimate use, in a quali- fied fuel use. (C) Qualified fuel use For purposes of this subsection, the term ‘‘qualified fuel use’’ means— (i) any use in the manufacture or produc- tion of any motor fuel, diesel fuel, aviation fuel, or jet fuel, or (ii) any use as such a fuel. (D) Chemicals to which paragraph applies For purposes of this subsection, the chemi- cals described in this subparagraph are acet- ylene, benzene, butylene, butadiene, ethyl- ene, naphthalene, propylene, toluene, and xylene. (E) Taxation of nonqualified sale or use For purposes of section 4661(a), if no tax was imposed by such section on the sale or use of any chemical by reason of subpara- graph (A), the first person who sells or uses such chemical other than in a sale or use de- scribed in subparagraph (A) shall be treated as the manufacturer of such chemical. (6) Substance having transitory presence dur- ing refining process, etc. (A) In general No tax shall be imposed under section 4661(a) on any taxable chemical described in subparagraph (B) by reason of the transitory presence of such chemical during any proc- ess of smelting, refining, or otherwise ex- tracting any substance not subject to tax under section 4661(a). (B) Chemicals to which subparagraph (A) ap- plies The chemicals described in this subpara- graph are— (i) barium sulfide, cupric sulfate, cupric oxide, cuprous oxide, lead oxide, zinc chlo- ride, and zinc sulfate, and (ii) any solution or mixture containing any chemical described in clause (i). (C) Removal treated as use Nothing in subparagraph (A) shall be con- strued to apply to any chemical which is re- moved from or ceases to be part of any smelting, refining, or other extraction proc- ess. (7) Special rule for xylene Except in the case of any substance im- ported into the United States or exported from the United States, the term ‘‘xylene’’ does not include any separated isomer of xylene. (8) Recycled chromium, cobalt, and nickel (A) In general No tax shall be imposed under section 4661(a) on any chromium, cobalt, or nickel which is diverted or recovered in the United States from any solid waste as part of a re- cycling process (and not as part of the origi- nal manufacturing or production process). (B) Exemption not to apply while corrective action uncompleted Subparagraph (A) shall not apply during any period that required corrective action by the taxpayer at the unit at which the re- cycling occurs is uncompleted. (C) Required corrective action For purposes of subparagraph (B), required corrective action shall be treated as uncompleted during the period— (i) beginning on the date that the correc- tive action is required by the Adminis- trator or an authorized State pursuant to— (I) a final permit under section 3005 of the Solid Waste Disposal Act or a final order under section 3004 or 3008 of such Act, or (II) a final order under section 106 of the Comprehensive Environmental Re- sponse, Compensation, and Liability Act of 1980, and (ii) ending on the date the Administrator or such State (as the case may be) certifies to the Secretary that such corrective ac- tion has been completed. (D) Special rule for groundwater treatment In the case of corrective action requiring groundwater treatment, such action shall be treated as completed as of the close of the 10-year period beginning on the date such ac- tion is required if such treatment complies with the permit or order applicable under subparagraph (C)(i) throughout such period. The preceding sentence shall cease to apply beginning on the date such treatment ceases to comply with such permit or order. (E) Solid waste For purposes of this paragraph, the term ‘‘solid waste’’ has the meaning given such term by section 1004 of the Solid Waste Dis- posal Act, except that such term shall not Page 2999 TITLE 26—INTERNAL REVENUE CODE § 4662 include any byproduct, coproduct, or other waste from any process of smelting, refining, or otherwise extracting any metal. (9) Substances used in the production of ani- mal feed (A) In general In the case of— (i) nitric acid, (ii) sulfuric acid, (iii) ammonia, or (iv) methane used to produce ammonia, which is a qualified animal feed substance, no tax shall be imposed under section 4661(a). (B) Qualified animal feed substance For purposes of this section, the term ‘‘qualified animal feed substance’’ means any substance— (i) used in a qualified animal feed use by the manufacturer, producer, or importer, (ii) sold for use by any purchaser in a qualified animal feed use, or (iii) sold for resale by any purchaser for use, or resale for ultimate use, in a quali- fied animal feed use. (C) Qualified animal feed use The term ‘‘qualified animal feed use’’ means any use in the manufacture or pro- duction of animal feed or animal feed supple- ments, or of ingredients used in animal feed or animal feed supplements. (D) Taxation of nonqualified sale or use For purposes of section 4661(a), if no tax was imposed by such section on the sale or use of any chemical by reason of subpara- graph (A), the 1st person who sells or uses such chemical other than in a sale or use de- scribed in subparagraph (A) shall be treated as the manufacturer of such chemical. (10) Hydrocarbon streams containing mixtures of organic taxable chemicals (A) In general No tax shall be imposed under section 4661(a) on any organic taxable chemical while such chemical is part of an inter- mediate hydrocarbon stream containing one or more organic taxable chemicals. (B) Removal, etc., treated as use For purposes of this part, if any organic taxable chemical on which no tax was im- posed by reason of subparagraph (A) is iso- lated, extracted, or otherwise removed from, or ceases to be part of, an intermediate hy- drocarbon stream— (i) such isolation, extraction, removal, or cessation shall be treated as use by the person causing such event, and (ii) such person shall be treated as the manufacturer of such chemical. (C) Registration requirement Subparagraph (A) shall not apply to any sale of any intermediate hydrocarbon stream unless the registration requirements of clauses (i) and (ii) of subsection (c)(2)(B) are satisfied. (D) Organic taxable chemical For purposes of this paragraph, the term ‘‘organic taxable chemical’’ means any tax- able chemical which is an organic substance. (c) Use and certain exchanges by manufacturer, etc. (1) Use treated as sale Except as provided in subsections (b) and (e), if any person manufactures, produces, or im- ports any taxable chemical and uses such chemical, then such person shall be liable for tax under section 4661 in the same manner as if such chemical were sold by such person. (2) Special rules for inventory exchanges (A) In general Except as provided in this paragraph, in any case in which a manufacturer, producer, or importer of a taxable chemical exchanges such chemical as part of an inventory ex- change with another person— (i) such exchange shall not be treated as a sale, and (ii) such other person shall, for purposes of section 4661, be treated as the manufac- turer, producer, or importer of such chem- ical. (B) Registration requirement Subparagraph (A) shall not apply to any inventory exchange unless— (i) both parties are registered with the Secretary as manufacturers, producers, or importers of taxable chemicals, and (ii) the person receiving the taxable chemical has, at such time as the Sec- retary may prescribe, notified the manu- facturer, producer, or importer of such person’s registration number and the in- ternal revenue district in which such per- son is registered. (C) Inventory exchange For purposes of this paragraph, the term ‘‘inventory exchange’’ means any exchange in which 2 persons exchange property which is, in the hands of each person, property de- scribed in section 1221(a)(1). (d) Refund or credit for certain uses (1) In general Under regulations prescribed by the Sec- retary, if— (A) a tax under section 4661 was paid with respect to any taxable chemical, and (B) such chemical was used by any person in the manufacture or production of any other substance which is a taxable chemical, then an amount equal to the tax so paid shall be allowed as a credit or refund (without inter- est) to such person in the same manner as if it were an overpayment of tax imposed by such section. In any case to which this paragraph applies, the amount of any such credit or re- fund shall not exceed the amount of tax im- posed by such section on the other substance manufactured or produced (or which would have been imposed by such section on such other substance but for subsection (b) or (e) of this section). Page 3000 TITLE 26—INTERNAL REVENUE CODE § 4662 (2) Use as fertilizer Under regulations prescribed by the Sec- retary, if— (A) a tax under section 4661 was paid with respect to nitric acid, sulfuric acid, ammo- nia, or methane used to make ammonia without regard to subsection (b)(2), and (B) any person uses such substance as a qualified fertilizer substance, then an amount equal to the excess of the tax so paid over the tax determined with regard to subsection (b)(2) shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by this section. (3) Use as qualified fuel Under regulations prescribed by the Sec- retary, if— (A) a tax under section 4661 was paid with respect to any chemical described in sub- paragraph (D) of subsection (b)(5) without regard to subsection (b)(5), and (B) any person uses such chemical as a qualified fuel substance, then an amount equal to the excess of the tax so paid over the tax determined with regard to subsection (b)(5) shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by this section. (4) Use in the production of animal feed Under regulations prescribed by the Sec- retary, if— (A) a tax under section 4661 was paid with respect to nitric acid, sulfuric acid, ammo- nia, or methane used to produce ammonia, without regard to subsection (b)(9), and (B) any person uses such substance as a qualified animal feed substance, then an amount equal to the excess of the tax so paid over the tax determined with regard to subsection (b)(9) shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by this section. (e) Exemption for exports of taxable chemicals (1) Tax-free sales (A) In general No tax shall be imposed under section 4661 on the sale by the manufacturer or producer of any taxable chemical for export, or for re- sale by the purchaser to a second purchaser for export. (B) Proof of export required Rules similar to the rules of section 4221(b) shall apply for purposes of subparagraph (A). (2) Credit or refund where tax paid (A) In general Except as provided in subparagraph (B), if— (i) tax under section 4661 was paid with respect to any taxable chemical, and (ii)(I) such chemical was exported by any person, or (II) such chemical was used as a material in the manufacture or production of a sub- stance which was exported by any person and which, at the time of export, was a taxable substance (as defined in section 4672(a)), credit or refund (without interest) of such tax shall be allowed or made to the person who paid such tax. (B) Condition to allowance No credit or refund shall be allowed or made under subparagraph (A) unless the per- son who paid the tax establishes that he— (i) has repaid or agreed to repay the amount of the tax to the person who ex- ported the taxable chemical or taxable substance (as so defined), or (ii) has obtained the written consent of such exporter to the allowance of the cred- it or the making of the refund. (3) Refunds directly to exporter The Secretary shall provide, in regulations, the circumstances under which a credit or re- fund (without interest) of the tax under sec- tion 4661 shall be allowed or made to the per- son who exported the taxable chemical or tax- able substance, where— (A) the person who paid the tax waives his claim to the amount of such credit or re- fund, and (B) the person exporting the taxable chem- ical or taxable substance provides such in- formation as the Secretary may require in such regulations. (4) Regulations The Secretary shall prescribe such regula- tions as may be necessary to carry out the purposes of this subsection. (f) Disposition of revenues from Puerto Rico and the Virgin Islands The provisions of subsections (a)(3) and (b)(3) of section 7652 shall not apply to any tax im- posed by section 4661. (Added Pub. L. 96–510, title II, § 211(a), Dec. 11, 1980, 94 Stat. 2799; amended Pub. L. 98–369, div. A, title X, § 1019(a)–(c), July 18, 1984, 98 Stat. 1022–1024; Pub. L. 99–499, title V, § 513(b)–(g), Oct. 17, 1986, 100 Stat. 1762–1765; Pub. L. 100–647, title II, § 2001(a), Nov. 10, 1988, 102 Stat. 3593; Pub. L. 106–170, title V, § 532(c)(2)(U), Dec. 17, 1999, 113 Stat. 1931.) Editorial Notes REFERENCES IN TEXT Sections 3005, 3004, and 3008 of the Solid Waste Dis- posal Act, referred to in subsec. (b)(8)(C)(i)(I), and sec- tion 1004 of that Act, referred to in subsec. (b)(8)(E), are classified to sections 6925, 6924, 6928, and 6903, respec- tively, of Title 42, The Public Health and Welfare. Section 106 of the Comprehensive Environmental Re- sponse, Compensation, and Liability Act of 1980, re- ferred to in subsec. (b)(8)(C)(i)(II), is classified to sec- tion 9606 of Title 42. AMENDMENTS 1999—Subsec. (c)(2)(C). Pub. L. 106–170 substituted ‘‘section 1221(a)(1)’’ for ‘‘section 1221(1)’’. 1988—Subsec. (b)(10)(A). Pub. L. 100–647, § 2001(a)(2), substituted ‘‘one or more’’ for ‘‘a mixture of’’. Subsec. (e)(3), (4). Pub. L. 100–647, § 2001(a)(1), added par. (3) and redesignated former par. (3) as (4). Page 3001 TITLE 26—INTERNAL REVENUE CODE § 4671 1986—Subsec. (b)(7). Pub. L. 99–499, § 513(c), added par. (7). Subsec. (b)(8). Pub. L. 99–499, § 513(d), added par. (8). Subsec. (b)(9). Pub. L. 99–499, § 513(e)(1), added par. (9). Subsec. (b)(10). Pub. L. 99–499, § 513(g), added par. (10). Subsec. (c). Pub. L. 99–499, § 513(f), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as fol- lows: ‘‘Except as provided in subsection (b), if any per- son manufactures, produces, or imports a taxable chemical and uses such chemical, then such person shall be liable for tax under section 4661 in the same manner as if such chemical were sold by such person.’’ Subsec. (d)(1). Pub. L. 99–499, § 513(b)(2), substituted ‘‘which is a taxable chemical’’ for ‘‘the sale of which by such person would be taxable under such section’’, in subpar. (B), and substituted ‘‘imposed by such section on the other substance manufactured or produced (or which would have been imposed by such section on such other substance but for subsection (b) or (e) of this sec- tion)’’ for ‘‘imposed by such section on the other sub- stance manufactured or produced’’ in last sentence. Subsec. (d)(4). Pub. L. 99–499, § 513(e)(2), added par. (4). Subsecs. (e), (f). Pub. L. 99–499, § 513(b)(1), added sub- sec. (e) and redesignated former subsec. (e) as (f). 1984—Subsec. (b)(1). Pub. L. 98–369, § 1019(a)(3), in- serted ‘‘or in the manufacture or production of any motor fuel, diesel fuel, aviation fuel, or jet fuel’’. Subsec. (b)(2)(A). Pub. L. 98–369, § 1019(b)(2)(A), sub- stituted ‘‘qualified fertilizer substance’’ for ‘‘qualified substance’’. Subsec. (b)(2)(B) to (D). Pub. L. 98–369, § 1019(b)(1), in- serted ‘‘fertilizer’’ after ‘‘qualified’’ wherever appearing in subpar. (B), inserted ‘‘fertilizer’’ after ‘‘Qualified’’ in subpar. (C) heading and in text substituted ‘‘The term ‘qualified fertilizer use’ means any use in the manufac- ture or production of fertilizer or for direct application as a fertilizer’’ for ‘‘For purposes of this subsection, the term ‘qualified use’ means any use in the manufacture or production of a fertilizer’’, and added subpar. (D). Subsec. (b)(5), (6). Pub. L. 98–369, § 1019(a)(1), added pars. (5) and (6). Subsec. (c). Pub. L. 98–369, § 1019(c), substituted ‘‘Ex- cept as provided in subsection (b), if’’ for ‘‘If’’. Subsec. (d)(2)(B). Pub. L. 98–369, § 1019(b)(2)(B), in- serted ‘‘fertilizer’’ after ‘‘qualified’’ and struck out ‘‘, or sells such substance for use,’’ after ‘‘such sub- stance’’. Subsec. (d)(3). Pub. L. 98–369, § 1019(a)(2), added par. (3). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1999 AMENDMENT Amendment by Pub. L. 106–170 applicable to any in- strument held, acquired, or entered into, any trans- action entered into, and supplies held or acquired on or after Dec. 17, 1999, see section 532(d) of Pub. L. 106–170, set out as a note under section 170 of this title. EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Superfund Revenue Act of 1986, Pub. L. 99–499, title V, to which it relates, see section 2001(e) of Pub. L. 100–647, set out as a note under section 56 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–499 effective Jan. 1, 1987, except as otherwise provided, see section 513(h) of Pub. L. 99–499, set out as a note under section 4661 of this title. EFFECTIVE DATE OF 1984 AMENDMENT Pub. L. 98–369, div. A, title X, § 1019(d), July 18, 1984, 98 Stat. 1024, provided that: ‘‘(1) IN GENERAL.—The amendments made by this sec- tion [amending this section] shall take effect as if in- cluded in the amendments made by section 211(a) of the Hazardous Substance Response Revenue Act of 1980 [Pub. L. 96–510, which enacted this section]. ‘‘(2) WAIVER OF LIMITATION.—If refund or credit of any overpayment of tax resulting from the application of the amendments made by this section is prevented at any time before the date which for one year after the date of the enactment of this Act [July 18, 1984] by the operation of any law or rule of law (including res judi- cata), refund or credit of such overpayment (to the ex- tent attributable to the application of such amend- ments) may, nevertheless, be made or allowed if claim therefor is filed on or before the date which for one year after the date of the enactment of this Act.’’ Subchapter C—Tax on Certain Imported Substances Sec. 4671. Imposition of tax. 4672. Definitions and special rules. Editorial Notes PRIOR PROVISIONS A prior subchapter C related to tax on hazardous wastes, consisted of sections 4681 and 4682, prior to re- peal by Pub. L. 99–499, title V, § 514(a)(1), Oct. 17, 1986, 100 Stat. 1767. § 4671. Imposition of tax (a) General rule There is hereby imposed a tax on any taxable substance sold or used by the importer thereof. (b) Amount of tax (1) In general Except as provided in paragraph (2), the amount of the tax imposed by subsection (a) with respect to any taxable substance shall be the amount of the tax which would have been imposed by section 4661 on the taxable chemi- cals used as materials in the manufacture or production of such substance if such taxable chemicals had been sold in the United States for use in the manufacture or production of such taxable substance. (2) Rate where importer does not furnish infor- mation to Secretary If the importer does not furnish to the Sec- retary (at such time and in such manner as the Secretary shall prescribe) sufficient infor- mation to determine under paragraph (1) the amount of the tax imposed by subsection (a) on any taxable substance, the amount of the tax imposed on such taxable substance shall be 10 percent of the appraised value of such substance as of the time such substance was entered into the United States for consump- tion, use, or warehousing. (3) Authority to prescribe rate in lieu of para- graph (2) rate The Secretary may prescribe for each tax- able substance a tax which, if prescribed, shall apply in lieu of the tax specified in paragraph (2) with respect to such substance. The tax prescribed by the Secretary shall be equal to the amount of tax which would be imposed by subsection (a) with respect to the taxable sub- stance if such substance were produced using the predominant method of production of such substance. (c) Exemptions for substances taxed under sec- tions 4611 and 4661 No tax shall be imposed by this section on the sale or use of any substance if tax is imposed on such sale or use under section 4611 or 4661.