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Dispute Over Import Duty with US Store

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Hi, a few weeks ago I bought a remote controlled car from a US store. Unfortunately when it arrived a piece had broken in transit and was unusable. So I contacted the store and said they would send out a replacement part "at their expense" and gave me $40 by way of apology. So far so good.

They said they would pre pay the duty but when it arrived I got a call from UPS saying the duty was due. To save messing around and any more delays I paid the duty myself in good faith, thinking that they would just reimburse me later no problem. But they refuse, despite me providing evidence from UPS.

They said I should have refused the parcel. Am I right in thinking there is no difference in price between them pre-paying or me paying then reimbursing me? So it should literally make no difference to them! So Im thinking maybe they intended to send it labelled as a 'gift' to save paying any duty - but this is surely illegal for businesses right?

Anyway after lots of angry emails they still refused, so I filed a complaint with PayPal. Unfortunately they sided with them "Unfortunately, we are unable to take any action on this claim because it is not eligible under PayPal Purchase Protection. Shipping companies cannot assess the fees for a destination country and forward the money to the destination country. The person who receives the package typically pays the customs fees and customs fees are not disputable." But I'm not disputing the amount of customs fees, they said they would pay them but are refusing to.

So I opened another PayPal dispute and now they are just blatantly lying in their responses saying that they gave the $40 as compensation for the mix up in duty, but this is completely untrue - they awarded it before they ever sent the parcel. Then they escalated the claim so am unable to reply and no doubt PayPal with go in their favor again. Its driving me crazy! I cant believe a business would just lie like this.

Is there anything I can do? I paid via Credit Card through PayPal if that helps. Can I report them to UPS? Its not a life changing amount, but its more about the principle now.

Thanks for any advice ;)
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