Delhi High Court Upholds Customs Broker Licence Revocation Over Forged Graduation Degree

The Delhi High Court has upheld the revocation of a Customs Broker licence after finding that the graduation degree submitted by the broker was forged.

The Division Bench of Justices Avneesh Jhingan and Shail Jain dismissed an appeal filed by R.K. Logistics challenging a CESTAT order which had upheld the revocation of its license, forfeiture of security and imposition of a ₹50,000 penalty.

Appellant had applied for a Customs Broker licence in 2014 under the Customs Brokers Licensing Regulations, 2013. In its application, the appellant disclosed an MBA degree from Sikkim Manipal University and stated that it possessed a graduation degree from Chaudhary Charan Singh University (CCSU). However, the graduation degree was not initially enclosed and an affidavit stating that the appellant was a graduate from CCSU was submitted instead.

Appellant subsequently cleared the written and oral examinations and was granted the licence in November 2016.

In August 2019, the Customs authorities received a complaint alleging irregularities in the appellant's BA degree from CCSU. The degree was forwarded to the University for verification.

CCSU reported that the details of the degree and marksheet did not correspond with its enrolment. Following the report, the Customs authorities suspended the licence and subsequently initiated proceedings for its revocation.

An Inquiry Officer concluded that Appellant had failed to establish the genuineness of the graduation degree and Customs authorities thereafter revoked the licence. CESTAT upheld this order.

Before the High Court, Appellant argued that the Customs authorities could not re-verify its educational qualification after granting the licence. It also contended that the University verification was inconclusive and that it had not been afforded an opportunity to cross-examine the University officials.

Rejecting these contentions, the High Court observed that both the Customs authority and the CESTAT had recorded a concurrent factual finding that the graduation degree furnished by Appellant was forged. Since the appeal before the High Court involved substantial questions of law, the Court held that it could not re-examine questions of fact.

On the argument concerning cross-examination, the Court held that cross-examination is not an "unfettered and absolute right".

So far as forfeiture of ₹5 lakh security deposit is concerned, the Court noted that Regulation 14 of the 2018 Regulations empowers the Commissioner of Customs to revoke a licence and order forfeiture of part or whole of the security for failure to comply with the Regulations. Since the finding of non-compliance with the educational requirements under Regulation 5(h)(i) and (ii) had been upheld, the forfeiture was within the scope of the provision, it said.

The Court further rejected the argument that a penalty could not be imposed after revocation of the licence. It observed that Regulation 18 permits imposition of a penalty of up to ₹50,000 on a Customs Broker who contravenes or fails to comply with the Regulations. Regulation 18(3) further provides that such penalty or action is without prejudice to action under the Customs Act or any other law.

"The imposition of penalty under regulation 18 is not contingent upon revocation of the licence," the Court held and dismissed the appeal.

For Appellant: Advocates Ravi Shekhar Jha, Raj Datt, Chandan& Mohit Kumar

For Respondent: Advocates Monica Benjamin, SSC with Laiba Arif & Prerika Narang