The pair have been summoned by a maid (Miss Piggy) to investigate the murder of Lord Bottomley (Wayne). Holmes assumes that the hideous form lying motionless at the table is the body, but it is merely Fielding the Butler (played by Gorgon Heap). Holmes quickly deduces that Fielding has committed the crime, and finds various incriminating pieces of evidence, including a drinking glass, a photograph of the butler murdering Bottomley, the fatal gun registered in Fielding's name and even the maid, who was an eyewitness. Unfortunately, all of the evidence seems to disappear whenever Holmes turns away, directly into Fielding's mouth.
When the four pieces of evidence (including the maid) have been eaten, Holmes decides that Fielding cannot be guilty, as there is no case against him. Since Holmes himself did not commit the murder, he pins the blame on Watson. Fielding devours him on the spot, leaving Holmes to come to the obvious conclusion that no murder has taken place. In response, Lord Bottomley sneezes.
This was the only UK Spot to come later in the program, rather than directly following the commercial break. According to Muppet Morsels from The Muppet Show: Season One DVDs, "Pachalafaka" was originally meant to be the UK Spot, but after deciding that the episode was short on songs, "Sherlock Holmes and the Case of the Disappearing Clues" was designated as the UK Spot instead.