DGGI finds 27 undeclared pouch-packing machines in UP pan masala unit; evasion of about ₹185 crore
Searches at six premises in Chitrakoot and Banda led to seizure of 15.5 lakh pouches. Since the capacity-based levy began on 1 February 2026, DGGI has booked 27 cases with evasion of ₹668 crore.
Key facts
- Published
- 21 August 2026
- Section
- GST
- Who it affects
- Pan masala and tobacco manufacturers
In 30 seconds
- 27 undeclared pouch-packing machines found: 6 for scented jarda, 9 for pan masala, 12 for dohara/desi gutkha.
- Evasion of GST, HSNS Cess and Central Excise duty of approximately ₹185 crore detected so far.
- Proprietor arrested on 19 August 2026 under the HSNS Cess Act, 2025 and the Central Excise Act, 1944.
- Since 1 February 2026: 27 cases, ₹668 crore evasion detected, 131 machines seized, 17 arrests.
हिंदी में सार
DGGI लखनऊ ने चित्रकूट और बांदा में छह जगह छापे मारकर 27 अघोषित पाउच-पैकिंग मशीनें पकड़ीं और करीब ₹185 करोड़ की टैक्स चोरी पकड़ी। 1 फरवरी 2026 से अब तक ऐसे 27 मामले दर्ज हुए हैं।
The operation
The Lucknow Zonal Unit of DGGI searched six premises in Chitrakoot and Banda districts connected with two firms — one manufacturing pan masala and allied products, the other trading. The searches began around midnight on 18 August 2026.
Officers found 27 undeclared pouch-packing machines and seized 15,50,922 pouches of finished goods, along with raw and packing material including 32.9 MT of areca nut and 2.8 MT of tobacco.
The levy behind the case
A capacity-based regime came into effect on 1 February 2026. Under the Health Security se National Security Cess Act, 2025 (HSNS), a monthly cess applies on pan masala, computed on the number, type and capacity of packing machines installed. A similar capacity-based central excise levy applies on chewing tobacco, jarda and gutkha under the Central Excise Act, 1944. Running undeclared machines is how the levy is avoided.
Enforcement so far
Since 1 February 2026, DGGI formations have booked 27 cases of suppression of production and clandestine clearance, detecting evasion of ₹668 crore. Voluntary payment of ₹11.7 crore has been made during investigation, 131 machines have been seized and 17 persons arrested.
Published 21 August 2026. Updated 3 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.