Mistake on Hotel booking in GOA, which I had to correct.

We booked the Golden Triangle holiday in India with a 3 day extension in GOA. When we got the Itinery in India we noticed that the hotel in GOA was not what we booked with Fleetway, which was a luxury 5 star hotel, it was actually 3 star budget hotel (the hotels online description not mine). We queried this with the rep who said he couldn't change anything as this is what the UK office had told him. We showed our booking documents to him but still he said he couldn't do anything. I told him to book the correct hotel and deliver correct documents to our hotel that evening. He said he could only do that if we paid the £300 for the hotel booking as they couldn't get a refund from the 3 star hotel. I told him to book the correct hotel and I'd sort the cock-up out when I got back to the UK.
All these conversations took place in the car whilst travelling in india. It was very upsetting and spoiled what had been so far a really good well organised holiday.
The rep in India at first tried to say that the budget hotel was as good as the luxury one we had booked. I told him we had seen both hotels on line and the standards weren't even close, which he smiled and nodded at in acceptance of the truth.
I have emailed Fleetway asking for my £300 back and I have had 3 receipts saying I'll get a response in 28 days. Considering it's a fairly straightforward big cock-up I can't see the problem. It should be a matter of sorry and here is your refund.
Well we shall wait and see what happens whilst they drag the 28 days out.
Unhappy customer.