Elegant communist accepting punishment (7)
I believe the answer is:
refined
'elegant' is the definition.
(I know that elegant can be written as refined)
'communist accepting punishment' is the wordplay.
'communist' becomes 'red' (red can informally mean communist).
'accepting' indicates putting letters inside (inserted letters are accepted).
'punishment' becomes 'fine' (fine is a kind of punishment).
'red' placed around 'fine' is 'REFINED'.
(Other definitions for refined that I've seen before include "Just like the cultured" , "Elegant, cultured" , "Polished" , "Freed from impurities by processing" , "Tasteful; genteel" .)