Malcolm McGowan, 61, originally from Edinburgh, disappeared after being found guilty of smuggling 28.3 million cigarettes into the country, which the HMRC said had denied the public purse of around £4 million in duty.
McGowan was sentenced in his absence in December 2001. Last night he began a four-year spell in prison following his extradition.
The smuggler, who was living in Galashiels when arrested in 2000, was part of a wider conspiracy to bring around 56 million cigarettes into the UK between November 1999 and March 2000. The plot involved 10 other men, with the overall loss of tax and duties linked to the illegal trade costing the UK taxpayer more than £8.2m.
Adrian Farley, assistant director of criminal investigation for HMRC, said: "McGowan is finally facing UK justice after 12 years on the run. We can now begin to recover the proceeds of his role in the crime."