2025 (1) TMI 88 - AT - Customs

Revocation of customs broker license - forefeiture of security deposit - levy of penalty - submission of forged graduation degree at the time of applying for grant of the license had submitted a forged graduation degree. Raj Kumar was accordingly asked to submit attested copy of the graduation degree and Raj Kumar did submit a self-attested copy of the graduation degree. Forged degree or not - HELD THAT - On a complaint received by the department a query was made by the department from the Chaudhary Charan Singh University Meerut regarding the genuineness of the graduate degree which the appellant had submitted to the department at the time of seeking appointment as a Customs Broker. The University in no uncertain terms informed the department that the details given in the graduate degree were not as per the University enrollment records or the confidential records. At the instance of the appellant the University again sought confirmation of the earlier report sent by the University and the University again informed the department that the earlier information given by the University was correct. The appellant has not produced any document from the University to substantiate that the graduate degrees submitted by the appellant is a genuine degree and only a bald assertion has been made by the appellant that the graduate degree submitted by the appellant is not forged. The finding recorded by the Commissioner that the graduate degree submitted by the appellant is a forged degree therefore does not suffer from any infirmity. Effect of such a forged graduate degree on the Customs Broker License issued to the appellant - HELD THAT - Once it is found that the graduation degree obtained by the appellant is a forged degree the appellant clearly did not satisfy the essential requirement contained in clause 5(f) of the 2013 Regulations for appointment as a Customs Broker. The 2018 Regulations came into effect from 14.05.2018. When the complaint was received by the department against the appellant regarding the graduation degree the 2018 Regulations had come into force. These Regulations supersede the 2013 Regulations except as respect things done or omitted to be done before such supersession. Under regulation 1(3) of the 2018 Regulations the 2018 Regulations shall apply to a Customs Broker who had been licensed either under the 2018 Regulations or under the earlier 2013 Regulations. Regulation 14 of the 2018 Regulations deals with revocation of license. It is in accordance with regulation 17 of the 2018 Regulations that a show cause notice was issued to the appellant and action was taken after the appellant was provided adequate opportunity by the enquiry officer and after the appellant was provided an opportunity to submit comments to the report submitted by the enquiry officer. Whether an applicant who had submitted a forged graduation degree which degree is an essential requirement for appointment as a Customs Broker can be permitted to continue as a Customs Broker? - HELD THAT - In M/S INDIAN OIL CORPORATION LTD. VERSUS SHRI RAJENDRA D. HARMALKAR 2022 (4) TMI 1423 - SUPREME COURT the Supreme Court observed that an employee who has produced a fake and forged mark sheet at the initial stage of appointment cannot be trusted by the employer. A person who has a submitted a forged graduation degree to seek appointment as a Customs Broker therefore should not be permitted to work as a Customs Broker - Fraud is an act of deliberate deception with a design to secure something which is otherwise not due. The expression fraud involves two elements deceit and injury to the person deceived. It is a cheating intended to get an advantage. Dishonesty should not be permitted to bear the fruit and benefit to the persons who played fraud or made misrepresentation and in such circumstances Courts should not perpetuate the fraud. In UNITED INDIA INSURANCE CO. LTD VERSUS RAJENDRA SINGH ORS 2000 (3) TMI 1077 - SUPREME COURT the Supreme Court again observed that fraud and justice never dwell together (fraus et jus nunquam cohabitant) and it is a pristine maxim which has never lost its temper over all these centuries. Conclusion - The inevitable conclusion therefore that follows from the aforesaid discussion and the decisions is that the appellant who had been granted a Customs Broker License on the basis of a forged graduation degree cannot be permitted to continue to work as a Customs Broker - The submission of the learned counsel for the appellant that action could have been taken only under the 2013 Regulations and not under the 2018 Regulations cannot also be accepted. There is therefore no infirmity in the order dated 01.07.2020 passed by the Commissioner revoking the Customs Broker License of the appellant and forfeiture of the security deposit and also imposing penalty of Rs. 50, 000/- on the appellant - appeal dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The legal judgment considered the following core issues:

• Whether the appellant's Customs Broker License should be revoked due to submission of a forged graduation degree.
• Whether the appellant met the qualifications under the Customs Broker Licensing Regulations 2013 and 2018.
• Whether the actions taken against the appellant were justified under the 2018 Regulations despite the license being granted under the 2013 Regulations.
• Whether the burden of proof regarding the authenticity of the graduation degree was appropriately discharged by the department.
• Whether the appellant's argument that the department's initial verification absolves him of responsibility holds merit.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Revocation of License Due to Forged Degree

• Legal Framework and Precedents: The Customs Broker Licensing Regulations 2013 and 2018 require a valid graduate degree from a recognized university. The Supreme Court precedents emphasize the importance of integrity and honesty in employment, especially where trust is crucial.
• Court's Interpretation and Reasoning: The court emphasized that a forged degree undermines the trust essential for a Customs Broker, referencing the Supreme Court's stance on fraudulent documents in employment.
• Key Evidence and Findings: The University confirmed that the degree details did not match their records, indicating forgery. The appellant failed to provide contrary evidence.
• Application of Law to Facts: The appellant's failure to meet the educational qualifications under the regulations justified the revocation of the license.
• Treatment of Competing Arguments: The appellant argued the department's initial verification should prevent revocation, but the court held that discovery of fraud allows for corrective action.
• Conclusions: The revocation was justified due to the forged degree, which violated the regulations.

Issue 2: Qualification Under 2013 and 2018 Regulations

• Legal Framework and Precedents: Both regulations require a graduate degree and an additional professional qualification. The 2018 Regulations apply to actions taken after their enactment.
• Court's Interpretation and Reasoning: The court found the appellant did not meet the qualifications at the time of license issuance due to the forged degree.
• Key Evidence and Findings: The appellant's degree was confirmed as forged by the University. The MBA degree was also questioned due to its reliance on the forged undergraduate degree.
• Application of Law to Facts: The appellant's qualifications were invalid under both sets of regulations, justifying action under the 2018 Regulations.
• Treatment of Competing Arguments: The appellant's claim that the 2018 Regulations could not apply was dismissed, as the fraudulent act persisted into the period governed by the newer regulations.
• Conclusions: The appellant was unqualified under both regulatory frameworks, validating the regulatory actions taken.

Issue 3: Burden of Proof on Forgery

• Legal Framework and Precedents: The burden of proof lies with the party asserting the forgery, but the appellant must also substantiate claims of authenticity.
• Court's Interpretation and Reasoning: The court held that the department met its burden by obtaining the University's confirmation of forgery, shifting the burden to the appellant to prove authenticity, which he failed to do.
• Key Evidence and Findings: The University's confirmation of non-conformity with its records was pivotal.
• Application of Law to Facts: The department's actions were supported by substantial evidence, and the appellant's failure to counter this evidence was decisive.
• Treatment of Competing Arguments: The appellant's argument about the department's initial verification was rejected, as ongoing compliance is required.
• Conclusions: The department successfully demonstrated the forgery, justifying the revocation.

Issue 4: Department's Initial Verification of Records

• Legal Framework and Precedents: Initial verification does not preclude subsequent action if fraud is later discovered.
• Court's Interpretation and Reasoning: The court emphasized that fraud vitiates any transaction, including initial verifications.
• Key Evidence and Findings: The University's confirmation of forgery post-verification was critical.
• Application of Law to Facts: The discovery of fraud allowed the department to act, despite initial verification.
• Treatment of Competing Arguments: The appellant's reliance on initial verification was deemed insufficient to counter the fraud finding.
• Conclusions: Initial verification does not protect against actions taken due to later-discovered fraud.

3. SIGNIFICANT HOLDINGS

• Verbatim Quotes: "Fraud and justice never dwell together" and "A person who seeks equity must come with clean hands."
• Core Principles Established: Fraudulent documents invalidate qualifications and justify revocation of licenses; initial verifications do not shield from later-discovered fraud.
• Final Determinations: The appellant's Customs Broker License was correctly revoked due to the forged degree, and the actions taken under the 2018 Regulations were justified.