Hyderabad, August 22: The Hyderabad CGST Zone has uncovered an illegal pan masala and tobacco unit in Medchal Malkajgiri district.
Officials estimated tax and cess evasion at around Rs 160 crore. They found the unit operating from a tin shed without registration.
The CGST team searched the premises on August 20 following specific intelligence inputs.
Hyderabad CGST Finds Undeclared Packing Machines
Officials detected 40 undeclared FFS pouch packing machines at the facility. Around 56 workers were also found manufacturing and packing products.
The team seized around 5,500 kg of finished pan masala and tobacco products. The seized stock included consignments worth Rs 76 lakh.
Officials also seized 2,015 kg of pan masala mixture and 810 kg of tobacco. They also recovered packing material and documents linked to the alleged operation.
Two vehicles reportedly used to transport the products were seized.
According to the Hyderabad CGST Zone, the unit cleared products without paying GST, HSNS Cess and Central Excise duty.
Officials arrested the alleged key organiser on August 21. The accused was produced before the Special Judge for Economic Offences in Hyderabad.
The court remanded him to judicial custody for 14 days.
Officials assessed the alleged evasion based on the verified stock, machinery, manpower and statements recorded during the investigation.
The capacity based tax and cess regime for the pan masala and tobacco sector came into force on February 1, 2026.
The department said it has intensified intelligence led enforcement against manufacturers using undeclared machinery.
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