SINGAPORE - The black market for contraband cigarettes is shrinking, figures released yesterday by the Singapore Customs suggest.

Customs seized 1.9 million packets of contraband cigarettes last year - more than 17 per cent lower than that in 2010 - and the number of peddlers nabbed also fell by nearly 35 per cent to 458.

The quantity of illegal cigarettes seized last year was a new low and represented the third straight year of decline in seizures, said Customs assistant director-general (Intelligence and Investigation) Lee Boon Chong.

Duty receipts from cigarettes last year also increased more than 4 per cent to S$917 million, which indicates that smokers are increasingly turning to legal cigarettes, according to Mr Lee.

Demand for contraband cigarettes, however, has not abated. Last year, 5,977 people were caught buying illegal cigarettes, a shade higher than that in 2010, where 5,885 were caught.

Customs also revealed that new illegal brands have surfaced. One example is the "Moon Mountain" brand, which is produced by an underground factory in an undisclosed neighbouring country and sold at even lower prices than other contraband cigarette brands in the black market here.

In total, the number of people arrested for cigarette-related offences last year inched up 1.5 per cent compared to 2010 to reach 26,164. But Customs said three-quarters of these cases were minor ones, such as incoming travellers who had on them a few packets of duty-unpaid cigarettes and were fined.

It added that four major syndicates were busted last year - three of which exploited sea routes - and resulted in more than 20,000 cartons of cigarettes seized. The duty and tax evaded exceeded S$1.9 million.

Meanwhile, the number of offenders who evade liquor duties rose by nearly 14 per cent to hit 2,323.

But only two persons were prosecuted, both of whom had smuggled in adulterated whiskey in modified car fuel tanks.

Customs said the buying, selling, conveying, delivering, storing, keeping, possession of or dealing with duty-unpaid goods were all serious offences under the Customs Act and the Goods and Services Tax Act.

If found guilty, offenders can be fined up to 40 times the amount of duty evaded and/or jailed for up to six years.