KUALA LUMPUR: They may be tiny, colourful and look a little like caviar, but fish eggs found on sushi are not necessarily considered a luxury delicacy under the law.
The High Court has ruled that tobiko (flying fish roe), masago (capelin roe) and frozen mentaiko (pollock roe) imported by restaurant chain Sushi King Sdn Bhd are not caviar substitutes, despite being seasoned, coloured and preserved.
Judge Norliza Othman ruled this when dismissing an appeal by the Customs Department director-general against a Customs Appeal Tribunal decision in favour of Sushi King over the classification of the three products.
The dispute centred on whether the fish eggs should be classified as caviar substitutes, which attract an 8 per cent import duty, or other prepared or preserved fish, which carry zero import duty.
On Oct 8, 2020, Sushi King submitted three applications to the Customs Department seeking tariff rulings for the imported fish roe.
The department classified the products as caviar substitutes, which attract an 8 per cent import duty.
Dissatisfied with the classification, Sushi King sought a review and proposed different tariff codes for the three products. However, Customs maintained its decision on Dec 7, 2021.
Sushi King then appealed to the Customs Appeal Tribunal, which ruled in its favour on Dec 1, 2023, and set aside the department's classification.
This prompted the Customs Department director-general to challenge the tribunal's decision in the High Court.
In its appeal, Customs argued that the products qualified as caviar substitutes because they had undergone several processes, including cleaning, seasoning, colouring and freezing.
It maintained that the processing methods and fish egg content met the requirements for caviar substitutes under the Customs Duties Order 2017.
Customs also argued that how the products were consumed should not determine whether they qualified as caviar substitutes.
However, Sushi King maintained that the products were commonly used as toppings or garnishes in Japanese cuisine and were neither consumed nor marketed as alternatives to caviar.
The company argued that not all processed or seasoned fish eggs could automatically be classified as caviar substitutes.
In her judgment, Norliza agreed with Sushi King, saying that not all fish eggs could be considered caviar substitutes and that how they were consumed was an important factor in determining their classification.
"Fish roe is a wide, all-encompassing term used to describe fish eggs, but not all fish roe is caviar or a caviar substitute.
"In this regard, caviar substitute is a very specific subset of fish roe based on its origin, methods of consumption and method of processing, which aims to mimic sturgeon caviar," she said in her grounds of judgment published by the Judiciary Department yesterday.
Norliza said Sushi King's imported products were used as toppings or garnishes in Japanese cuisine rather than being marketed as alternatives to caviar.
She said the World Customs Organisation's explanatory notes described caviar substitutes as products made from the eggs of fish other than sturgeon, which were prepared and consumed as caviar.
The judge said imported goods must be classified according to the relevant legal provisions and the WCO's guidelines.
She also found that the Customs Appeal Tribunal had carefully examined the products, including their composition, preparation methods and how they were consumed, before ruling in Sushi King's favour.
Senior federal counsel Nur Aishah Maulat Ahmad Zakiuddin and federal counsel Muhaimin Mohamed represented the appellant, while S. Saravana Kumar and Darshini Sharma appeared for Sushi King.
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