Judgment — ECLI:EU:T:1998:208
Date: 1998-09-15
Language of the case: Portuguese
Court formation: Third Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: European Social Fund (ESF)
Concepts: Statement of reasons;European Social Fund
Procedure: Action for annulment - unfounded;Action for annulment - successful
Origin: Portugal

summary tables (Annex 21 to the application) produced by it do notdistinguish the theoretical course hours from the practical course hours, but doesnot understand the conclusion drawn by DAFSE from that fact. 132. The applicant points out that, under the applicable national legislation, theexpenditure incurred for the operations in question can be proved only by invoicesor receipts. It considers that, in view of the receipts provided by it (Annex 22 tothe application) and the certainty that the courses were held, there is nothing tojustify cancellation of the amount entered under that sub-heading. In any event,even if doubts persisted regarding the type of courses held, the principle ofproportionality requires that at least an amount based on the lowest level ofremuneration should be regarded as justified for all the courses, that it is to saythat all the courses should be regarded as practical courses. 133. The Commission considers that the applicant has not provided information to showthat the receipts submitted have any bearing on the courses at issue, since thedocuments submitted do not indicate clearly either the identity of the staff or thetype of courses held. Moreover, the sum of the expenditure documents submitteddoes not coincide with the sum declared. Finally, it points out that Order No18/MTSS/87, published in the Diário da República of 11 May 1987, provided that'recipient organisations shall keep, for each operation, an attendance record fortrainees and training staff and course programmes, distinguishing theoreticalcourses from practical courses. 134. The Court considers that the documents produced by the applicant to indicate thekind of course provided in relation to the first file and the identity of the trainingstaff who took part (Annexes 21 and 22 to the application) are, when scrutinised, so imprecise as to raise serious doubts as to whether the courses in question wereactually held, as DAFSE rightly observed in point 14.3.1a of its letter of 22September 1995. The Commission therefore committed no manifest error ofassessment by considering that the applicant, which ran a large number of differenttraining courses involving numerous staff, had not demonstrated that thedocumentary evidence produced by it in fact related to the courses covered by thefirst file and by consequently refusing to accept in their entirety the expensesclaimed in that regard. 135. Consequently, the third argument must be rejected. 136. As regards, fourth, the administrative staff (sub-heading 14.3.1c) the applicantconsiders that the reduction made by the Commission for that item is based on amisunderstanding, since the disputed receipts were signed and stamped, as is clearfrom Annex 23 to the application. It considers that the evidential value of thereceipts concerned is not in any event affected by the absence of signatures orstamps. 137. The Commission observes that the reduction at issue was prompted by the fact thatthe receipts concerned bore neither stamps nor signatures when the financial audittook place. 138. The Court considers that the applicant has not demonstrated that it produced toDAFSE the stamped and signed documents annexed to the application beforeDAFSE completed its financial audit. Consequently, the Commission committedno manifest error of assessment by refusing to take account of receipts which, whenpresented, did not meet the national legal requirements intended, inter alia, toensure that such receipts relate to an expense actually incurred. 139. Consequently, the fourth argument must be rejected. 140. As regards, fifth, the specialised work (sub-heading 14.3.8), the applicant considersthat the disqualified expenditure is proved by the invoice appended as Annex 20to the application. It states once more that there is no reason why a single receiptshould not cover services attributable to different account headings. 141. The Commission states that the item concerned was not taken into considerationbecause of the lack of supporting documents: the invoice produced by the applicant related to other items. 142. The Court observes that the amounts shown in the documents submitted by theapplicant as Annex 20 to its application do not correspond with those whichaccompanied its final payment claim. The Commission did not therefore commitany manifest error of assessment by refusing to take account of the documentsconcerned in determining the final payment of assistance to be made to theapplicant. 143. Consequently, the fifth argument must be rejected. 144. As regards, sixth, rental for moveable and immoveable items (sub-heading 14.3.9),the applicant considers that the statement of reasons in the letter of 22 September1995 does not enable it to understand the grounds on which the Commission madethe first two reductions for that item. As regards the third reduction, it refers tothe considerations which it put forward in relation to sub-heading 14.2.7 (seeparagraph 127). 145. The Commission states that the first reduction related to the acquisition of durablegoods which could not, under the applicable national legislation, qualify fordepreciation in the year of acquisition. The second amount related to a designcourse not covered by the first file. The third amount was refused because theinvoice relating to it did not properly indicate the services provided. 146. The Court considers that the reasons provided by DAFSE's letters of 11 September1991 and 22 September 1995 concerning the first two reductions made in respectto that item, although indeed concise, nevertheless enabled the applicant, whichknew the details of the file concerned, to challenge the content thereof. However,the applicant has produced no evidence to show that the Commission in any waycommitted a manifest error of assessment in that regard. As regards the thirdreduction, the Court refers to paragraph 129 above. 147. Consequently, the sixth argument must be rejected. 148. As regards, seventh, the raw materials, auxiliary materials and consumables (sub-heading 14.3.12), the applicant states that, under Portuguese social legislation,expenditure attested by invoices dated no later than the fifth working day ofJanuary in the year following that in which the expense was incurred must beaccepted. The invoice at issue (Annex 24 to the application) fulfilled thatcondition. 149. The Commission considers that the invoice does not fall within the period actuallycovered by the financing for the operation. Under the national VAT code, aninvoice of that kind should have been issued when the goods in question weresupplied and should have been accompanied by delivery documents. However,neither of those conditions was fulfilled in this case. 150. The Court finds that neither the Commission's precise reasoning nor the nationallegislation on which it relied in rejecting the expenditure indicated in the invoiceat issue can be identified from an analysis, in the light of the documents before theCourt, of the contested decision and of the relevant paragraphs of the DAFSEletters of 11 September 1991 - which essentially repeats the objections raised in thereport by Audite - and of 22 September 1995, to which that decision refers. Consequently, the Court is not in a position to undertake the requisite judicialreview of the contested decision, as required by the case-law cited in paragraph 99above. Therefore, the contested decision infringes Article 190 of the Treaty to theextent to which it relates to sub-heading 14.3.12 of the final payment claim. 151. Consequently, the seventh argument must be upheld. The contested decision musttherefore be annulled to the extent to which it relates to sub-heading 14.3.12. 152. As regards, eighth, taxes and charges (sub-heading 14.3.13), the applicant statesthat it included in that item the amounts paid in respect of VAT to the teacherswho were VAT registered, the VAT having been deducted from theirremuneration, shown under sub-heading 14.3.1a. 153. Since the Court has taken the view above (paragraph 134) that the Commissioncommitted no manifest error of assessment in refusing to take account of expensesclaimed by the applicant in respect of teachers' remuneration, this eighth argument,concerning the VAT applicable to that remuneration, must be rejected for thesame reasons. 154. As regards, last, normal depreciation (sub-heading 14.6), the applicant denies thatits activity can be assessed solely on the basis of the number of workers'employed, that number being particularly low in its case because providers ofoccasional services play a significant role. 155. The Commission states that DAFSE applied the usual criteria to that item, namelya coefficient based on time and physical factors, which reflects the proportion ofthe normal business activity of an undertaking accounted for by training. 156. Although it is indeed conceivable, as maintained by the applicant, that depreciationmethods can be based more specifically on the actual proportion of anundertaking's turnover accounted for by training rather than on the total numberof employees assigned to such training activities, the Court considers that thetraditional method used by DAFSE in this case, and accepted by the Commission,in itself takes sufficient account of the relative importance of training amongst theoverall activities of the recipients of ESF assistance. Since the method used isreasonable, the Commission committed no manifest error of assessment by applyingit. 157. Consequently, this last argument must be rejected. - The merits of the applicant's arguments in Case T-181/96 158. As regards, first, the teaching material (sub-heading 14.2.1), the applicant maintainsthat DAFSE wrongly considered that some of that material constituted 'durablegoods, not eligible for inclusion under the heading 'teaching material. Thecriterion used for that exclusion had no legal basis. 159. The Commission states that the applicant included under the heading of 'teachingmaterial, purchases of chairs, cupboards, desks and tables, which are durablegoods. 160. The Court considers that the Commission committed no manifest error byconsidering that the chairs, cupboards, desks and tables concerned constituteddurable goods and not teaching material or by consequently transferring theamounts relating to those goods to the heading 'normal depreciation (see alsoparagraphs 124 and 125). 161. Consequently, the first argument must be rejected. 162. As regards, second, advertising of the courses and the recruitment of trainees (sub-headings 14.2.2 and 14.2.3), the applicant considers that, contrary to the viewexpressed by DAFSE in its letter of 22 September 1995, it is not possible to requirethe content of newspaper advertisements to be specified in the invoices for thoseadvertisements. It observes that the invoices and receipts submitted (Annex 18 tothe application) indicate precisely the newspapers in which the announcementswere published. 163. The Commission observes that the receipts produced by the applicant do notdescribe the nature or substance of the expenditure concerned. Nor did theapplicant annex to those receipts a copy of the advertisements in question, as is thenormal practice. 164. The Court does not consider it unreasonable to require a recipient of ESFassistance to provide copies of advertisements published in newspapers to promoteits training activities. The sole purpose of that requirement is to make certain thatexpenditure was actually incurred for that purpose. The Commission did nottherefore commit any manifest error of assessment by accepting the positionadopted by DAFSE on that point in its letter of 22 September 1995. 165. Consequently, the second argument must be rejected. 166. As regards, third, the specialised work (sub-heading 14.2.7), the applicant observesthat the letter of 22 September 1995 states that the invoices produced indicate'neither the hours nor the technical specialists concerned. Such a requirement,it says, is not imposed by the applicable Portuguese tax legislation. As regardsmore particularly the 'TV Europa invoice (Annex 20 to the application), thenature of the services provided is clear from the words 'repairs to electricalequipment appearing on that invoice. 167. The Commission considers that the receipt issued by TV Europa does not specifythe nature of the expenditure concerned. In so far as it may have related to therepair of a video recorder, that expenditure was, in any event, ineligible. 168. The Court observes that the applicant has not produced evidence to showincontestably that the invoices produced to DAFSE were sufficiently detailed toenable it to verify the reality of the expenses concerned. As regards moreparticularly the invoice from TV Europa, the Court notes that it makes no mentionof the specific type of repair to which it relates. The Commission thereforecommitted no manifest error of assessment by accepting the position adopted byDAFSE regarding those various reductions in its letter of 22 September 1995. 169. Consequently, the third argument must be rejected. 170. As regards, fourth, the remuneration of teaching staff (sub-heading 14.3.1a), theapplicant contests the view that the full sum relating to that item is ineligible. Itputs forward the same arguments as in Case T-180/96 (see paragraphs 131 and132). 171. The Commission considers that the applicant has not produced evidence that thereceipts submitted bore any relation to the courses in question. 172. The Court considers, as it has already observed with regard to Case T-180/96(paragraph 134), that the documents produced by the applicant to indicate the kindof course provided in relation to the second file and the identity of the training staffwho took part are, when scrutinised, so imprecise as to raise serious doubts as towhether the courses in question were actually held, as DAFSE rightly observed inparagraph 14.3.1a of its letter of 22 September 1995. The Commission thereforecommitted no manifest error of assessment by considering that the applicant, whichran a large number of different training courses involving numerous staff, had notdemonstrated that the documentary evidence produced by it in fact related to thecourse covered by the second file and by consequently refusing to accept in theirentirety the expenses claimed in that regard. 173. Consequently, the fourth argument must be rejected. 174. As regards, fifth, the administrative staff (sub-heading 14.3.1c), the applicant agreesthat Mrs Irene Vaz Lopes did indeed attend one course while providing trainingin another, but denies that she was thereby prevented from providing assistance forthe second course. 175. The Court observes that, since one and the same person cannot attend one courseand at the same time assist in the teaching of another, the Commission cannot havecommitted any manifest error of assessment by refusing to take account of theremuneration of the person concerned as an administrative assistant. 176. Consequently, the fifth argument must be rejected. 177. As regards, sixth, budgetary control and management (sub-heading 14.3.7), theapplicant accepts that it erroneously included a receipt (Annex 24 to theapplication) under heading 14.3.1, whereas it should have appeared under heading14.3.7. It considers, however, that the auditors were informed of that fact in duetime. 178. The Commission contends that a receipt produced at the stage of proceedingsbefore the Court of First Instance cannot be taken into consideration. 179. Since the applicant has not been able to establish that, as it claims, it produced thereceipt annexed to its application during the administrative procedure beforeDAFSE, the Court considers that the Commission committed no manifest error ofassessment in refusing to take account of the amount in question. 180. Consequently, the sixth argument must be rejected. 181. As regards, seventh, the specialised work (sub-heading 14.3.8), the applicant statesthat DAFSE took the view that an invoice drawn up by the company Novafarm wasnot sufficiently specific. However, the description of the services provided is briefbecause a description of that kind is sufficient for tax purposes. 182. Since the applicant itself concedes that the invoice at issue is in summary form, theCommission cannot have committed any manifest error of assessment by refusingto take account of the expense in question. 183. Consequently, the seventh argument must be rejected. 184. As regards, eighth, rental for moveable and immoveable items (sub-heading 14.3.9),two receipts are involved. The first receipt, the applicant states, was includedunder that heading at the suggestion of DAFSE itself. Nor does it understand thelegal basis on which the second receipt was considered partially ineligible, thecriterion of rationality applied being unknown. 185. The Commission states that the sum shown on the first receipt was transferred tothe item 'normal depreciation (sub-heading 14.6) because it related to a durablegood. The second sum corresponded to the ineligible part of a receipt concerningthe rental of computers which had been dealt with on the basis of a criterion ofrationality. 186. The Court considers, with regard to the first receipt, which is accepted as relatingto data-processing equipment, that the Commission committed no manifest errorof assessment in considering that such equipment constituted 'durable goods tobe included under heading 14.6, 'normal depreciation. As regards the secondreceipt, the Court finds that the applicant's argument is not sufficiently well set outto meet the requirements of Article 44(1)(c) of the Rules of Procedure of theCourt of First Instance, under which every application must contain, in particular,a summary of the pleas in law on which it is based. In that connection, theapplicant essentially does no more than claim not to understand the basis of thecriterion of rationality applied, even though specific details of it are given in theletter of 22 September 1995. Under those circumstances, the applicant's argumentin its application, as amplified in the reply, does not enable the Court to examineits merits (see, to that effect, Case T-84/96 Cipeke v Commission [1997] ECR II-2081, paragraph 30 et seq.). 187. Consequently, the eighth argument must be rejected. 188. As regards, ninth, non-durable materials and goods (sub-heading 14.3.10), theapplicant states that, by refusing that expenditure with respect to the purchase ofoffice equipment, DAFSE glossed over the fact that the management and operationof courses necessarily involve the expense of purchasing items of that kind. 189. The Court considers that the sum concerned was properly refused, inasmuch as itconstitutes a duplication of expenses included in item 14.2.3 (paragraph 160). Consequently, the Commission committed no manifest error of assessment inrejecting that expense. 190. Consequently, the ninth argument must be rejected. 191. As regards, tenth, taxes and charges (sub-heading 14.3.13), the applicant states thatit included under that item amounts paid in respect of VAT to VAT registeredteachers, the VAT having been deducted from their remuneration, included undersub-heading 14.3.1a. 192. Since the Court has taken the view above (paragraph 172) that the Commissioncommitted no manifest error of assessment by refusing to take account of expensesclaimed by the applicant in respect of teachers' remuneration, this tenth argument,concerning the VAT applicable to that remuneration, must be rejected on the samegrounds. 193. As regards, eleventh, general administrative expenses (sub-heading 14.3.14), theapplicant states that office equipment is necessary for the various stages of training,thus justifying the inclusion of that type of equipment under various headings. 194. The Commission merely points out that, since the sums in question have alreadybeen taken into account in items 14.2.3 and 14.3.10, they cannot be regarded asqualifying twice. 195. The Court considers that, since the applicant has not demonstrated that, contraryto what is stated in the letter of 22 September 1995, the expenditure included byit under that heading had not already been included under other headings, theCommission cannot have committed any manifest error of assessment by refusingto take account, a second time, of the same type of expenses under heading14.3.14. 196. Consequently, the eleventh argument must be rejected. 197. As regards, twelfth, other operating and management expenses (sub-heading14.3.15), the applicant denies that the invoice for the first contested amount wasnot presented. The other two amounts refused corresponded to equipment to beused for the courses and were not durable goods. 198. The Commission states that the evidence concerning the first amount was notproduced in due time. The other two amounts relate to furniture falling within theheading 'normal depreciation, to which the annual rate of depreciation of 10%was applied. 199. The Court considers that, in the absence of any documents showing that the firstreceipt was forwarded to DAFSE during the administrative procedure and that theother amounts involved related to non-durable goods, the applicant has not provedthat the Commission committed any manifest error of assessment in withdrawingaid for the expenditure at issue. 200. Consequently, the twelfth argument must be rejected. 201. As regards, lastly, normal depreciation (sub-heading 14.6), the applicant claims notto understand the calculation method on the basis of which DAFSE consideredcertain amounts to be 'unconfirmed. It then puts forward the same argumentsas in Case T-180/96 (see paragraph 154). 202. The Commission states that DAFSE applied the usual criterion to that item,namely a coefficient based on time and physical factors, which reflects theproportion of the normal business activity of the undertaking accounted for bytraining. 203. Although it is indeed conceivable, as maintained by the applicant, that depreciationmethods can be based more specifically on the actual proportion of anundertaking's turnover accounted for by training rather than on the total numberof employees assigned to such training activities, the Court considers that thetraditional method used by DAFSE in this case, and accepted by the Commission,in itself takes sufficient account of the relative importance of training amongst theoverall activities of the recipients of ESF assistance. Since the method used isreasonable, the Commission committed no manifest error of assessment by applyingit. 204. Consequently, this last argument must be rejected. The request for the production of documents 205. In each of its applications, the applicant claims that the Court should order theproduction both of the Commission's administrative files and of DAFSE'sadministrative files. 206. It is clear from the foregoing considerations that the Court has effectively been ableto reach a decision in these proceedings on the basis of the documents producedby the parties in the written procedure and those provided by the Commissionpursuant to measures of organisation of procedure. 207. It is not therefore necessary to order the Commission to produce the administrativefiles relating to the two cases. 208. Nor is it necessary to request the Portuguese authorities, pursuant to the secondparagraph of Article 21 of the EC Statute of the Court of Justice, to produce intheir entirety the national administrative files relating to the two files in question. 209. The applicant's request for the production of documents must, for those reasons,be rejected. Costs 210. Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs if they are asked for in the successful party's pleadings. However, under Article 87(3), the Court may order that the costs be shared whereeach party succeeds on some and fails on other heads. 211. Since the application in Case T-180/96 has been partially upheld and each party hasapplied for costs, it is appropriate to order the parties to bear their own costs inthat case. 212. Since the applicant has been unsuccessful in Case T-181/96 and the Commissionhas asked for costs, the applicant should be ordered to pay the costs. On those grounds, THE COURT OF FIRST INSTANCE (Third Chamber) hereby: 1. Joins Cases T-180/96 and T-181/96 for the purposes of judgment; 2. In Case T-180/96, annuls Commission Decision C (96) 1185 of 14 August1996 to the extent to which it relates to sub-heading 14.3.12 of theapplicant's final payment claim, and for the rest dismisses the application; 3. Dismisses the application in Case T-181/96; 4. Orders the parties to bear their own costs in Case T-180/96; 5. Orders the applicant to pay the costs in Case T-181/96. Tiili Briët Potocki Delivered in open court in Luxembourg on 15 September 1998. H. Jung V. Tiili Registrar President 1: Language of the case: Portuguese.