Court affirms forfeiture of security and penalty under Customs Broker Licensing Regulations, ruling no absolute right to cross-examine university officials during inquiry
In a significant decision dated September 21, 2026, the Delhi High Court (Division Bench comprising Justices Avneesh Jhingan and Shail Jain) dismissed the appeal filed by M/s R.K. Logistics challenging the revocation of its Customs Broker licence by the Commissioner of Customs. The case centered around allegations that the appellant had obtained the licence by submitting a forged affidavit claiming graduation from Chaudhary Charan Singh University (CCSU), Meerut, without enclosing the actual degree certificate during the licence application process.
The appellant had applied for the Customs Broker licence in November 2014 under the Customs Brokers Licensing Regulations, 2013, stating possession of an MBA from Sikkim Manipal University and graduation from CCSU via affidavit. Despite clearing written and oral examinations, a complaint in August 2019 triggered verification of the appellant's graduation credentials. CCSU's verification and re-verification reports revealed discrepancies indicating that the BA degree and mark sheet details did not match university enrolment records, suggesting forgery.
Consequently, the Customs Commissioner suspended the licence and initiated revocation proceedings under the Customs Brokers Licensing Regulations, 2018. The inquiry confirmed the forgery, leading to revocation of the licence, forfeiture of the security deposit of Rs. 5,00,000, and imposition of a penalty of Rs. 50,000. The appellant's subsequent appeal to the Customs, Excise & Service Tax Appellate Tribunal was dismissed, prompting the present appeal before the High Court.
The appellant raised multiple grounds, including jurisdictional challenges to the re-verification process, prior acceptance of qualifications at the time of licence grant, the validity of proceedings initiated on an anonymous complaint, and denial of the opportunity to cross-examine university officials. It also contended that the penalty was improperly imposed post-revocation and questioned the applicability of penalty provisions and forfeiture limits.
The Court, after a detailed examination of the facts and the relevant statutory framework, upheld the concurrent findings of the Commissioner and the Tribunal. It observed that under Regulation 5(h) of the 2018 Regulations, a Customs Broker applicant must be a graduate from a recognized university and possess a specified professional qualification. The appellant's failure to prove the genuineness of the graduation degree justified revocation.
On the procedural issue, the Court noted that the appellant did not raise the cross-examination plea before the Inquiry Officer or during revocation proceedings and did not press it before the Tribunal. Citing Supreme Court precedent in Kanungo and Co. v. Collector of Customs and a recent Delhi High Court decision in Vallabh Textiles v. Additional Commissioner Central Tax GST, the Court clarified that cross-examination is not an absolute right in such regulatory proceedings.
Regarding penalty imposition, the Court held that Regulation 18 authorizes penalties independently of revocation proceedings. The penalty of Rs. 50,000 and forfeiture of security were thus valid and within the regulatory limits.
The Court dismissed the appeal, stating no substantial question of law arose warranting interference. The final order of the Tribunal dated December 23, 2024, confirming the revocation order dated July 1, 2020, was upheld. The decision reinforces the strict compliance requirement for Customs Broker licensing and affirms the authority's power to revoke licences and impose penalties for misrepresentation, even post-licence grant.
Bottom Line:
Customs Broker Licence - Licence obtained on basis of affidavit regarding graduation degree - University verification and re-verification showing degree details not matching university records - Revocation of licence, forfeiture of security and penalty upheld - Cross-examination not an absolute or unfettered right - No substantial question of law arises.
Statutory provision(s):
Customs Brokers Licensing Regulations, 2018 - Regulations 5(h), 14, 17, 18; Customs Act, 1962 - Section 130
M/s R. K. Logistics v. Commissioner of Customs, (Delhi)(DB) : Law Finder Doc Id # 2990696
