Elegant socialist accepting punishment (7)
I believe the answer is:
refined
'elegant' is the definition.
(I know that elegant can be written as refined)
'socialist accepting punishment' is the wordplay.
'socialist' becomes 'red' (socialism is often associated with the colour red).
'accepting' indicates putting letters inside (inserted letters are accepted).
'punishment' becomes 'fine' (fine is a kind of punishment).
'red' going around 'fine' is 'REFINED'.
(Other definitions for refined that I've seen before include "Polished" , "With impurities removed" , "Elegant, cultured" , "Purified, oil say" , "Urbane" .)