1. In Portugal Mode C is mandatory for all aircrafts (including light a/c) flying within controlled airspace.
2. Controllers do monitor Mode C information for the aircrafts under their responsability (identified aircrafts).
3. When traffic information is given about one aircraft not identified altitude is not given because ATCo didn't had the chance to verify the information about Mode C.
4. If you we're squawking 2000 or 7000 the ATCo might have filtered you off or, even possible, the system is unable to show your Mode C due to the presence of other aircrafts with the same squawk.
5. Try squawking 7001 (non discrete code) and ask the controller if he's seing you on position XXXX and what is your Mode C indication.