Motueka man Lawrence Reginald Jury's 4.8 tonnes of home-grown tobacco leaf was seized, then given back and has now been seized again, more than seven years after authorities raided his farm.
The saga is laid out in a lengthy Court of Appeal decision which found that an earlier High Court judgement was incorrect in determining that it had not been adequately proven that Jury intended for the tobacco to be manufactured.
It is not illegal to grow, dry and store tobacco but it is against the law to manufacture it - that is prepare it for smoking or any other purpose - without a licence.
"The parties accept that if the tobacco that was seized had been manufactured for smoking, it would have attracted excise duty of $3.34 million," according to the recently-released decision.
Jury's tobacco was seized after he was observed by authorities selling a 40kg bale of tobacco leaf to a man in March 2010.
The other man was followed to a property in Auckland, where they found approximately 34kg of cured tobacco and 1.8kg of cut or processed tobacco, along with equipment used for the production and manufacture of tobacco.
A few days later Customs, accompanied by armed police, searched Jury's Motueka farm and seized some 4.8 tonnes of stored tobacco leaf.
Jury and the other man were convicted of manufacturing tobacco in the North Shore District Court. Jury then successfully appealed this to the High Court, which concluded the Crown had not established beyond reasonable doubt that Jury had intended for the tobacco to be used for an illegal purpose.
However, Customs did not return the tobacco and Jury's appeal to the Customs Appeal Authority was dismissed.
Jury then went back to the High Court, which overturned that ruling and ordered the tobacco be returned to the grower.
Customs then hit back through the Court of Appeal, which said in the latest decision that it was "not enough for [Jury] to simply protest the forfeiture, requiring Customs to then make out its case. Rather the obligation is on [Jury] to present material and argument in support of the ground advanced that there was no legal basis for seizure".
It found the High Court's conclusion that it had not been adequately proved that Jury intended the tobacco to be manufactured was flawed.
"It can be safely inferred that Mr Jury would only continue to have a market for his tobacco if those who bought it unlawfully manufactured it," the Court of Appeal said.
"There was no other large-scale use to which it could be put by purchasers. These facts, we consider, provide an adequate evidential basis for the inference that Mr Jury was in possession of the tobacco with the direct intention that it be manufactured."
The decision said Jury had invested "considerable efforts, resource and expense in that venture".
"He wanted to sell the tobacco. He knew the only market for the tobacco was those who would unlawfully manufacture it. In order to sell the tobacco, he needed it to be manufactured. Therefore he directly intended that it be bought and used in manufacture."
The High Court's decision was overturned and the previous Customs Appeal Authority ruling reinstated, meaning the tobacco is to be forfeited to the Crown.