What happens if more than 1 website has the same content, how Google defines which website to penalize for content duplication, if at all there is any concept of penalization.
In my experience, which site is found first is definitely an important factor, but there are others. Take an extreme example. Site A and Site B have the same article. The article on Site A is indexed first. But the article on Site A links to the article on Site B. In this case, the article on Site B has a real serious chance in getting marked as the original. There are other factors too, and those relate to Google's "opinion" about the site as a whole and not just about the individual page. In fact, I think that Google's canonicalization algorithm is one of the most valuable part of its search engine algorithm. As in all thinks search engine, your mileage might vary
Duplicates don't get as much fame as originals in most cases , there they don't affect your ranking . However sometimes dupes are succesful .
Being indexed first is just one factor, but it is a possibility that if a site steals your content soon after you published it, and somehow managed to gain far more backlinks, it may outrank you. There are definitely other factors G will consider regarding who is the owner, but it can be hard sometimes. I'd monitor the important keywords carefully and notify Google manually if this happens, in addition to filing DMCA complaints.
Is there any specific percentage (the extent of fresh/new) of content, say 10%, 20%, 30%, 40% etc. that we can follow to avoid the site from being blacklisted
Do not have any specific number to offer. But I would like to chime in with the input that it may be more than just the percentage. Here is an example: Suppose there is the original article of 20 sentences. No you rewrite the first 10 sentences. So, it is 50% new. But the second part of the article is an exact copy. Instead, if every alternate sentence were new, though the percentage would still be 50, it would read quite different. I am not recommending this, just offering it as a possible course of action.