More than 16.5 million illegal cigarettes have been seized in Castleton, the single largest haul in the North West in the last 12 months.

The cigarettes, worth an estimated £3.8m in evaded duty and VAT, were uncovered at an industrial unit by HM Revenue and Customs Officers.

They were imported as ‘fruit’ with a large quantity of oranges and kiwi fruits used in an attempt to conceal the smuggled tobacco.

Two men from Greater Manchester and one from South Wales were arrested on suspicion of excise fraud and bailed until March 2012.

HMRC assistant director for criminal investigations Mike O’Grady said: “Tobacco smuggling on this scale isn’t about cheap cigarettes, it is organised fraud on a global scale. HMRC teams operate across the North West to disrupt this illicit trade, which has a devastating impact on legitimate retailers having to compete against crime on this scale.

“Anyone with information about the storage or sale of illegal tobacco should contact Customs on 0800 59 5000,” he added.

The seized cigarettes will be recycled and used to fuel the national electricity grid.