Three people were arrested after police raided a godown at Maddurupadu village in the outskirts of Kavali in Nellore district and seized Gutka worth Rs 22,000.
Police also seized unaccounted cash of over Rs 41 lakhs.
Nellore SP Bhaskar Bhushan said, "We arrested all three accused involved in Gutka products transportation. We seized 1 kg gutka worth Rs 22,000."
Bhushan added, "This is a new gang, operating since past three months. They are distributing in Nellore and Prakasam districts. We will soon burst the racket. Mallikarjuna Rao (32), Arun Kumar (23), and B Nageawara Rao (48) have been caught."
Further, an investigation is underway.
( With inputs from ANI )