The Central Board of Excise and Customs has decided to defreeze beleaguered Kingfisher Airline's 10 bank accounts.

The CBEC has also allowed the airline to pay its dues of Rs 110 core in installments till March 31, 2012.

The breakthrough came about after Airline's high-profile promoter Vijay Mallya met CBEC chairman SK Goel and sought resolution of the problem.

"We will defreeze the accounts after the airline gives a written undertaking on Tuesday," a finance ministry official privy to the development told ET.

The company will pay service tax dues of about Rs 15 crore for November on Tuesday and rest April-October due of Rs 110 crore in installments before the end of financial year.

Mallya is understood to have highlighted the problems faced by the airlines due to rise in aviation turbine fuel prices.

"He was told that no relief could be given on service tax front as the airline had already collected the tax from passengers and he was liable to deposit it with tax authorities," the official said.

Service tax authorities had frozen 10 accounts of Kingfisher Airlines after they found that the airline had allegedly not deposited the tax it had collected from passengers.

CBEC chairman SK Goel had on Friday said the airline owned the government Rs 110 crore towards service tax for April-October period.

Mallya declined to comment on the meeting.

Meanwhile, another debt-ridden air carrier Air India today paid Rs 8 crore towards service tax for the month of November, sources said.

As many as 11 bank accounts of Air India were frozen by the tax authorities for non-payment of service tax. Kingfisher's accounts have been frozen twice recently by the service tax department.

Its accounts were first frozen for two days in the first week of November and it was only after getting an assurance from the airline officials that they would deposit the dues in three installments the department withdrew its order.

The debt-laden airline has a total outstanding loan liability of Rs 6,419.60 crore, which includes Rs 9,730.37 crore provided to Kingfisher for non-fund based activities.