I think the sign is clear enough,but like a lot of these permit or P&D conditions, one must read the sign carefully.
So you're now invited to wait for the NtO, or cough-up. So far nobody has come up with a "technical" defence, so you have to consider if it's worth taking the matter further, and risk the full PCN penalty. Having said that, many councils re-offer the discount when rejecting reps against an NtO, but I'm not sure if this council does, but somebody will know and will hopefully come on here and tell you.