A system and method are provided for detecting extraneous material, often referred to as scarf, in the interior of a tubular steel product. The system is arranged to illuminate one end of the tube as it passes through the field of view of an imaging system, preferably a Smart Camera. The camera obtains images and processes the images to determine if scarf is present in the interior of the tube. Preferably a processor determines the percentage of dark pixels in the interior of the tube as detected in the image and if a predetermined threshold is met or exceeded, the tube fails. A blob sensor is also preferably used to avoid false positives where the dark pixels do not have a certain amount of connectivity.