C-3/67

1. Cf. paragraph 1, Summary Case 36/64, High Authority and Article 15 of Deci­ [1965] E.C.R., p. 329. sion No 16/58 of the High Authority are Cf. paragraph 2, Summary Case 2/56, designed to enable the High Authority, Rec. 1957, p. 13. either in the absence of any declaration The High Authority is under no obliga­ or where a declaration is incomplete or tion to communicate all the details of its insufficiently proven, to make good by preliminary investigations, or to 'make any suitable means the lack of a declara­ known its views on wholly irrelevant tion or to remedy the omissions or objections. inaccuracies in declarations supplied by A party cannot plead to its advantage undertakings. any uncertainties in the High Authority's The powers conferred on the High attitude caused by that party's own Authority to correct declarations are not conduct. distinct from those which it may exercise 2. Article 12 of Decision No 13/58 of the in the total absence of a declaration.

In Case 3/67

Fonderie Acciaierie Giovanni MANDELLI, a partnership having its office in Turin, represented by it Managing Partner, Walter Mandelli, assisted by Professor Mario Giuliano of the University of Milan, advocate of the Milan Bar and at the Corte di Cassazione, with an address for service in Luxembourg at the Chambers of Ernest Arendt, avocat-avoué, 6 rue Willy-Georgen,

applicant,

1 — Language of the Case: Italian.

JUDGMENT OF 8. 2. 1968 — CASE 3/67

Advocate-General: K. Roemer

Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts metric tons for the period covered by the disputed decisions. The facts of the case may be summarized as An initial check was carried out at the follows: Mandelli premises between 16 and 25 The firm Mandelli is engaged in a mixed January 1961 by the Société Anonyme production, according to the Commission, Fiduciaire Suisse on behalf of the High in that it produces both castings and steel Authority. The Commission claims that the ingots and is only subject to the provisions documentary records necessary for a proper of the ECSC Treaty and, consequently, to check were not available as the applicant the ferrous scrap equalization scheme, in had not kept them; moreover it came to be respect of the latter production. convinced that steel ingots had been sold Declarations of its consumption of scrap without invoicing. subject to equalization were duly sent by the On 16 April 1962 Mandelli submitted to the applicant company to the High Authority, High Authority, at the latter's specific showing the acquisition of a total of 10 702 request, invoices relating to its consumption

of electricity, after which an interview took the equalization scheme. place between representatives of Mandelli The applicant was notified of the two deci and of the High Authority in Luxembourg sions by registered letter with form of on 24 September 1962 and new checks were acknowledgment of receipt dated 15 De made at the applicant's premises by the cember and received by it on 20 December Istituto Fiduciario Italiano (Fidital) be 1966. tween 11 and 14 December 1962 and between 8 and 18 January 1963.

By its decision of 7 December 1966 it deter — So far as is necessary, order the following mined, first, the undertaking's total pro measures of inquiry: duction of crude steel, by taking into [a) A report by one or more foundry account the length of time during which the experts of international repute to undertaking had actually been in produc determine what the quantities of tion, the hours during which the furnaces scrap acquired and consumed by the were operating, the casting time, the time the applicant undertaking during the furnaces were actually in use, the number period in question could have been, of loads and the furnace capacity; it then taking into account its special featu deducted from this the steel produced for res, the technological running-in castings and for ingots, on the basis of a period in which it was at the time any comparison between the steel made for other factors, including those arising ingots and the production of crude steel from the undertaking's past develop (calculated by reference to the charging, ment; alternatively or additionally: the melting loss, the arisings in the plant (b) A visit of inspection in order to ob and certain added scrap) assessed the tain a better and direct impression of production of ingots and from that the the technical facts and the real consumption of scrap subject to equaliza nature of the situations described tion. during the course of the present case; This is fixed, for the period 1 February 1957 — order the delendant to pay the costs. to 30 November 1958, at 24 026 metric

JUDGMENT OF 8. 2. 1968 — CASE 3/67

application. Accordingly, the reasons given for the The submissions and arguments of the decision are not sufficient to demonstrate parties may be summarized as follows: the logical process whereby the High Authority arrived at the assessment which it 1. Infringement of an essential procedural seeks to enforce. requirement Thirdly, the applicant claims (relying on a statement by Professor Régé) that the report The applicant claims that the reasons given made by the expert Mr Studer, and conse for the decision fixing the assessable tonnage quently the contested decision, failed to are not adequate, lack relevance and are take into account inconsistent. — certain special technical features of the In this respect it alleges, first, that even undertaking which is solely a castings according to the wording of the contested foundry, (in particular the plant, the decision, the various checks carried out by machining systems, the working methods, the High Authority in January 1961, De and the input of scrap to the furnace) and cember 1962 and January 1963, and the it considered only theoretical factors electricity invoices produced, were not (working hours and capacity of the sufficient to enable the High Authority to furnaces); decide that the declarations made by the — the stage reached by the company in its company were incorrect; on the contrary, technological development at the period the contested decision relies, in order to under consideration; justify procuring the expert's report of 6 — arisings. October 1964 which formed the main basis Lastly, the applicant remarks that the High of the assessment of the amounts of scrap Authority sent it a statement of account on subject to equalization, on 'certain incon 8 April 1963 according to which its contribu sistencies and disparities in the information tions for the period covered by the contested to be taken into consideration', and 'some decision amounted to approximately Lit 8 difficulties of a technical nature, in particu

Its own checks were (concerning the expert's report) justify the made the more difficult by the fact that it amendment in certain special particulars of had to distinguish the consumption of scrap the calculations previously communicated subject to equalization from that exempted. by the departments of the High Authority', The first check, despite its summary nature it does no more than declare that it has owing to the absence of several essential taken Mandelli's objections into account, documents, showed that the declared con 'to the extent to which they appear to be sumption was lower than the actual con justified and acceptable, namely.

MANDELLI v COMMISSION

ed. The expert was not an arbitrator. That pany, and these had subsequently been the High Authority did not passively accept shown to be incorrect. the results of his investigations only demon Concluding, the defendant says that it con strates its detachment and good will. siders the statement of reasons for the dis The High Authority need not answer point puted decision to be consistent and to give a by point all the applicant undertaking's clear and relevant explanation of the factors observations. It is enough that the contested forming the basis of the determination of the decision should contain—as it does in the applicant's contributions, as well as the present case—a clear statement of the logical interaction of the necessary pro reasoning leading to the operative part of cedures.

Doubtless it failed to take into account the running-in the High Authority is entitled to rectify on period is that the undertaking had been its own initiative any such declarations in producing castings and steel ingots since at support of which no valid proof can be least 1954 and that its third furnace came supplied, but it cannot do so by making its into operation in October 1956. own assessment. The defendant further claims that the The applicant also points out that it was not arisings from castings did not in any way notified by the High Authority of the results influence the calculation of the amount of of the checks carried out in December 1962 scrap subject to equalization.

JUDGMENT OF 8. 2. 1968 — CASE 3/67

13/58 reveals that the High Authority is also Lastly, the defendant claims that it did take entitled on its own intiative to correct in­ account of the undertaking's special charac­ accurate declarations, or those in support teristics to the extent necessary to determine of which no valid proof can be supplied, by its consumption of scrap subject to equal­ making an inductive assessment. If this ization. power were denied to it, this would amount to discrimination against undertakings IV — Procedure which, unlike the applicant, keep proper books of account. The written procedure followed the normal The defendant notes, moreover, that the course. On hearing the report of the Judge- applicant itself agreed that an expert's Rapporteur and the views of the Advocate- report should be obtained with the very General the Court decided that no measures same object of assessing its scrap consump­ of inquiry were necessary. tion. The defendant was asked to produce certain As to the second point, the defendant claims documents and did so within the required that there is no obligation on the High time. Authority to give official notice of the results The parties presented oral observations at of its checks. In the present case, however, the hearing on 5 December 1967, and replied the applicant was told that the results of the to several questions put by the Judge- checks did not coincide with the declara­ Rapporteur. tions submitted. It was because of this that The Advocate-General delivered his opinion the High Authority had considered a report at the hearing on 18 January 1968. from a technical expert to be appropriate.

The applicant claims that this constitutes discriminatory treatment, in view of the High Authority's practice in relation to other undertakings. (a) The statement of reasons for a decision is sufficient where on the one hand it enables those concerned to know the essential considerations of fact and of law

upon which the High Authority relies, and on the other hand enables the Court to exercise the judicial review entrusted to it by the Treaty. The High Authority has given a clear and consistent statement of the reasons for its decision as regards the recourse to an estimated assessment, the procedure followed and the facts taken into consideration in applying this procedure. These elements are sufficient to enable the applicant to understand the scope of the decision concerning it and to defend its interests, as well as to enable the Court to exercise its review.

(b) The discrepancy found between the provisional information communicated to the applicant during the preliminary procedure and the decision of 7 December 1966 does not affect the validity of the decision, which is justified in itself. The applicant cannot plead to its advantabe discrepancies which are due mainly to the deficiencies and uncertainties present in the information which it supplied.

The High Authority was under no obligation to communicate to the applicant all the details of its preliminary investigations; its only duty, under the Treaty, is to provide a full statement of the reasons for its decision.

As for the objections to the results of the checks carried out by the High Authority, the reasons given in the disputed decision are sufficiently explicit to enable the applicant to know the extent to which its observations were taken into account. The High Authority, for its part, was not bound to make known its views on wholly irrelevant objections concerning the method of assessment used. This is the case in particular with regard to the objections based on the operation of the castings foundry.

According to Article 2 of Decision No 13/58 of 24 July 1958 and Article 15 of Decision No 16/58 of the same date, as extended by Decision No 18/58 of 15 Octo­ ber 1958, the High Authority is entitled, should undertakings fail to declare the factors for calculating the equalization contributions, to estimate these on its own authority. The same provisions allow the High Authority to correct on its own authority declarations in support of which no valid proof can be supplied.

These provisions are designed to enable the High Authority, either in the absence of any declaration or where a declaration is incomplete or insufficiently proven to make good by any suitable means the lack of a declaration or to remedy the omis­ sions or inaccuracies in declarations supplied by undertakings. The powers con­ ferred on the High Authority to correct declarations are not distinct from those which it may exercise in the total absence of a declaration.

In the course of the successive checks which the High Authority caused to be carried out it was established that the applicant was unable to produce the accounting and other documents on the basis of which it would normally have been possible to determine or to verify the consumption of assessable scrap. The High Authority was therefore entitled to have recourse to the procedure of making an estimated assessment.

The method of assessment used in this case—based on an estimate of the capacity and operating times of the furnaces for the purpose of calculating the undertakings aggregate production of steel and of thus establishing, after subtracting the con­ sumption of the casting foundry, the production of steel for ingots—was well adapted to give a reasonable assessment of the consumption of scrap subject to contribution. Moreover, the result reached by the method used by the High Author­ ity coincides largely with the information supplied by the applicant in the pre­ liminary stages of the procedure. The possibility of a discrepancy between the result arrived at by such a method and the actual consumption is a risk which must be borne by the applicant, whose conduct it was that induced the High Authority to have recourse to the assessment procedure.

The criticisms levelled at the method of estimated assessment adopted in this case by the High Authority therefore cannot be accepted.

3. Costs

Under Article 69(2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Coal and Steel Community, especially Articles 4, 14, 15, 33, 47, 53, 80 and 92; Having regard to the Protocol on the Statute of the Court of Justice of the European Coal and Steel Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities,

THE COURT

Delivered in open court in Luxembourg on 8 February 1968.

A. Van Houtte R. Lecourt

Registrar President

OPINION OF MR ADVOCATE-GENERAL ROEMER 18 JANUARY 1968 1

Index

Introduction (Facts, conclusions of the parties) 34

Mr President, metric tons) for the period here in question, Members of the Court, from February 1957 to November 1958, and it paid a certain amount (Lit 29 941 334) by The applicant in the case on which I give my way of contributions into the equalization opinion today is an Italian undertaking in fund. the iron and steel industry with a works in As with other undertakings, the High Au­ Regina Margherita (Turin). We will go into thority had the information supplied by the the details of its production later, but in any applicant checked on a number of occasions. event it is certain that the undertaking used The first was in January 1961, by the Société- ferrous scrap in its manufacturing process Fiduciaire Suisse which presented its report and that the High Authority found it liable thereon on 5 May 1961. It showed that not in consequence to pay contributions to the all the documents necessary for the check ferrous scrap equalization fund. The under­ were available at the applicant's works, so taking itself seems always to have been of that no reliable picture of the actual amounts the same opinion, for it made regular de­ of scrap bought could be formed. The High clarations of bought scrap (totalling 10 702 Authority therefore tried to get precise

1 — Translated from the German.