The cigarettes, estimated to be worth almost £10,000 in unpaid excise duty and VAT, were discovered in a car after it was stopped by police on the A1 near Hillsborough.
John Whiting, Assistant Director, Criminal Investigation, HMRC said: “Tobacco smuggling is organised fraud, encouraging and supporting criminality within our communities and robbing taxpayers of billions each year in unpaid duty and VAT.
“With cheap cigarettes you may think you are getting a bargain, but you really have no idea what it is you are paying for. Anyone with information about the storage or sale of illegal tobacco in their area should contact the Customs’ hotline on 0800 59 5000.”
The two men were interviewed by HMRC officers and released on bail pending further enquiries. Investigations are continuing.