If the deductor is charged penalty amount u/s 234E then this penalty has to be paid to the Income Tax Department using Challan No.281 and this penalty cannot be waived under any circumstance.
What is Section 234E ?
Section 234E – Levy of Fees:
Failure to submit TDS return on time will result in fees on the deductor.
If you delay or forget to file your TDS return, fees of Rs. 200 per day will be levied on the deductor, as long as TDS return is not filed.
The levied amount of fee is not supposed to exceed the TDS deductibles.
Prior to TDS filing such fee should be paid and it should be reflected in the TDS return.