The paint stripper chemical T-butanol was found in two bottles of Russian Standard Star vodka seized from Spalding takeaway Zorba 3.
Trading standards officers checked the bottles and found they had false UK Paid Duty stamps belonging to the Smirnoff brand.
Both bottles were tested by experts who declared them “unfit for human consumption” and revealed they had a lesser alcoholic strength than shown on the label.
During the police and trading standards swoop on May 4, five bottles of Russian Standard Star were found under the counter near the till along with three bottles of Krupnik vodka and three bottles of Zubrowka vodka.
A further 11 bottles of Krupnik and eight bottles of Zubrowka were found in a cupboard in the kitchen.
County council safer communities manager Ian Newell told the licensing panel hearing that trading standards began working with Lincolnshire Police on counterfeit alcohol and non-duty paid alcohol in the wake of an explosion at an illegal still in Boston last year when five men were killed.
Part of the hearing was held behind closed doors because investigations are ongoing.
Mr Newell said counterfeiting alcohol is serious, organised crime.
He said: “The victims are the consumers they cheat, whose health they put at risk.
“We continue to highlight the risks of making illegal alcohol and buying and selling illegal alcohol.”