A team of DGCEI officers searched the "unregistered" manufacturing unit and found 21 pouch-packing machines in running condition, the people said. The factory operated from a poultry farm on Pavan College Road in Kolar, they said, adding the unit manufactured Khaleja, Rebel, Remo, Kabali, Dubai, MC, HAI and AAA1000 brands of pan masala.
The machines, raw material and other equipment have been seized, the official said. Unaccounted cash amounting to Rs 83 lakh was seized from various premises in Kolar and Guntur in Andhra Pradesh, the people said. The unit evaded central excise duty to the tune of Rs 400 crore, they said.
People familiar with the matter said the authorities suspect a Guntur-based real estate businessman is linked to the illegal manufacturing unit. Searches at the house of the businessman in Guntur led to Rs 27 lakh being seized.
A person responsible for operations, logistics and appropriation of sale proceeds at the clandestine manufacturing unit in Kolar has been arrested and remanded to 15-day judicial custody, people familiar with the matter said.