Essential character test kept mortar-coated steel pipes classified as steel pipes, preserving exemption eligibility.

Spirally welded steel pipes subjected to cement mortar lining and coating retained their character as steel pipes for classification and exemption purposes. The steel base was treated as giving the goods their essential character, while the mortar layer was only a finishing process to make the pipes suitable for underground use. As no substantial manufacture creating a new product was shown, the article remained mortar-coated steel pipes and did not lose eligibility for the claimed notification benefit.

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Issues: Whether spirally welded steel pipes subjected to cement mortar lining and coating retained their identity as steel pipes for classification and exemption, or became a new product so as to deny the benefit of Notification No. 208/83.

Analysis: The product was held to be a composite article in which the steel base gave the goods their essential character. The mortar coating was only a finishing process to make the pipes suitable for underground use and did not alter the essential nature of the goods. No substantial manufacture bringing into existence a new product was shown, and the product remained mortar-coated steel pipes.

Conclusion: The process did not result in a new product, and the pipes were entitled to the claimed classification and exemption.

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