Mr Williams added: "I take the wife shopping in the van. It is my private vehicle as well as my work van."
Mr Williams' wife Sue has already paid the fine, fearing it would increase if not settled promptly.
But her husband remains defiant, and said he would be challenging the punishment. "I have appealed against this even though I initially paid the fine otherwise it would have increased to £50.
"I've sent up my insurance certificate and am awaiting the outcome."
Simon Clark, the director of smoking freedom group Forest, condemned the fine as "absolutely ridiculous".
He said: "It smacks of some jobsworth council official interpreting the law to the most extreme level.
"This surely is not what the change in the law was intended for - it was not meant to harass and persecute people going about their ordinary lives.
"It is ridiculous that someone should be fined for smoking in their own private vehicle away from any workplace."
A spokesman for Ceredigion council said Mr Williams's vehicle was stopped by police as part of a multi-agency operation.
"A total of 56 vehicles were stopped and inspected during the initiative and, as a result, three fixed penalty notices were issued in connection with contraventions of the smoking in smoke-free places legislation," said the spokesman.
"All three fixed penalties have been paid.
"When stopped, both Mr Williams and his male passenger were found to be smoking.
"Based on information received from Mr Williams at the scene, fixed penalty notices were served on both persons.
"Both persons have now acknowledged the offences and elected to pay the fixed penalty rather than having the matter considered by the court."
The spokesman added the matter was therefore considered to be closed and no record of criminal conviction would be recorded against the individuals concerned.
A Welsh Assembly Government spokesman said: "The smoke-free regulations state that a vehicle shall be smoke-free if it is used for work by more than one person, regardless of whether they are in the vehicle at the same time, to protect everyone who uses the vehicle from the harmful effects of exposure to second-hand smoke, regardless of when they use the vehicle.
"Smoking is permitted in vehicles used for work purposes that are for the sole use of the driver and are not used as a workplace by anyone else, either as a driver or a passenger."
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