OP, this is a procedural matter and you should treat it as such. Just set out the key issues, nothing to do with the contravention which by your own account was committed because this would be a distraction.
Write to the council. These are not representations as such because you are outside this framework. There is no provision in law or, I'll bet, in council procedures for a CEO or anyone to accept payment in these circumstances. A vehicle once removed must be delivered to a car pound and only there may the owner recover their vehicle on payment and require a receipt.
So for the moment IMO the issue is what happened at the location.
Apparently you don't have a receipt but your bank records would show a payment comprising the discount plus removal fee. And who is the payee(the person paid) according to your bank account?
One step at a time, but quick steps!
Do you have a record of this payment and to whom was it made?
Once we've (hopefully) established the start of this part of the paper trail then you can write to the council...
On 31 July I was issued with a PCN, copy enclosed which I noticed as I observed your operatives removing my car.
I met the operatives as they were in the process of lifting my vehicle(its wheels were off the ground but not yet placed on the removal vehicle). They demanded full payment of £265(£200 and £65 for the removal fee and penalty respectively) to return my car. Under protest I phoned ****** and paid £265 to a/c *********, copy of this transaction from my account enclosed. Your operatives did not provide me with any paperwork.
Given that your operatives were not authorised to demand payment, that no payment was due because the vehicle should have been returned to the ground as it had not been placed on the removal vehicle and that proper procedures regarding receipt and formal notification as to my legal options were not followed then the council has a serious problem. The degree to which I need to be involved with the resolution of your problems will depend upon your response to this complaint.
Please acknowledge receipt by return.
Yours
is my approach.