Unfair service

Two years back (I think it was June/July) I bought a Mobicel V4 at PEP Senekal branch. After using it for about 8months it started giving me problems, it would switch itself off and when I switch it on it would be stuck on the Mobicel logo. It was well within the "12 months" guarantee, I took it back and it was repaired, a week later the same thing happened and I took it back again for repair and it was still within guarantee, it didn't fall in the water or tempered with whatsoever. When I went to PEP to ask why I haven't received my phone they called Mobicel headquarters and they said the phone has physical damage which it didn't have when I handed the phone in, in addition they said a Repair will cost R600 (I bought the phone at that price) its like me buying another phone. And they said in order for it to return without being fixed it's going to cost me R250. I don't understand how and why should I pay because the phone was still in guarantee and it didn't have any physical damage when I handed it in. Please help me get my phone back