The Mandi unit of Crime Investigation Department (CID) along with forest department officials seized 1,000 litres of illegally extracted cedar (deodar) wood oil from the Janahal Pahnala Rajgiri Reserve Forest area of Kullu district on Saturday.
The teams raided the place based on a tip off and seized the oil which was stored in five drums.
CID deputy superintendent of police (DSP) Manohar Lal confirmed the seizure and said those involved in the crime fled the spot.
The DSP said the forest is on an isolated hill top, and that those involved must have had an informer who alerted them when the team entered the area.
The oil finds applications in the fields of medicine, art, industry and perfumery, he said.
The DSP said they received information from residents who spotted smoke in the forest area, which was unusual. He said the team also seized pieces of the wood and the fireplace used for the purpose.
The forest department had banned the extraction of oil from cedar wood, he said. "They had issued license only on the condition that companies uprooting the trees will plant double the number of trees."
He said a case had been registered against unidentified persons under the forest act at CID police station in Bharari, Shimla.
Further investigation in the case will be carried out by sub-inspector Ramesh Parashar who has been deputed as the investigating officer (IO) in the case.