Over 150 containers of refuse tea had managed to slip through customs and reached their overseas destinations, officials said.
The containers had passed through scanners used by the Customs Department and reached Dubai and Iran via Kuwait.
Officials said that the refuse tea had not been detected as the scanners were not operating properly.
Investigations had revealed that seven suspects were involved in the scam to export refuse tea between 2016 and 2017.
The refuse tea had been exported using forged documents.
Customs spokesman Sunil Jayaratne told The Sunday Leader the scam had been unearthed when two containers were checked at the Orugodawatte container yard last Friday.
Refuse tea had been found in the two containers