Following a Supreme Court directive, the department of telecommunications has decided to refund the interest on excess licence fees collected from cellular service operators by December 2003.

However, the department will not refund the interests on the amount due. It has also decided to adjust the refunds against the licence fees and the spectrum charges paid by cellular operators every quarter, instead of giving cash.

Cell firms said the department's decision of not paying the interest on the amount due was against the Supreme Court judgment.

"We may approach the Supreme Court again to seek a clarification. However, this may be done after the department calculates the exact refund amount because we do not want the refund process to be delayed," said an industry source.

While the court had directed a refund to Birla AT & T Communication, BPL Mobile, Escotel Mobile and Fascel, the government decided to give a refund to all cellular operators who had migrated to the new revenue-sharing regime in 1999.

Earlier, the Supreme Court had dismissed the department's appeal and asked it to modify its demand regarding the interest on licence fees collected following the adoption of the migration regime in 1999.

The court had stated: "We direct the department to modify the demand issued to the cellular operators to the extent it is found to charge a higher amount of licence fee or interest on principles set out in the order.

The excess amount, which is liable to be refunded to the cellular operators will be adjusted towards the outstanding or future dues and if still any amount becomes due to them, the same will be refunded at the relevant bank rates. In other respects, the directions given by the tribunal are maintained."

According to the migration package, the effective date of commencement of the licence was extended notionally by six months.

The government granted licence fee relief for six months. But while computing the dues, the department took into account these six months' licence fees for determining the interest due on arrears and charged at a rate of 5 per cent.