"Perdone, señor, ¿qué hora es?"
Translation:Pardon me, sir, what time is it?
Literally you are correct. However, I suspect the 'me' part is really optional in everyday spoken language. Perdoneme should also be acceptable here.
To turn a Spanish third person formal and singular verb (whose infinitive ends in -ar) into a command, the "-a" gets changed into a "-e.""Perdone" is the command form of the verb "perdonar." For this reason, the Spanish sentence is odd because it's a request that is simultaneously a command.
In English, this is a grammatical formality and "Pardon me, sir ... " is allowable, but is it a grammatical formality in Spanish or is it bad Spanish syntax?