Apple - Apple Iphone 7 covered under replacement program rejected for no fault of mine

I was using apple iphone * since Jan'**. In Sep'** i found an issue of no service in my mobile and approach apple regarding this. i came to know that there is a free replacement program running for this issue. Phone was sent to apple repair center at benguluru from service center after doing VMI by service center. Copy of service report enclosed where in service center has clearly mentioned that there is no issue with my phone. After a prolonged follow up, apple team is telling that this phone is not covered under warranty due to hard ware damage and asking for Rs.***** for paid replacement. Apple care team was talking one sided way without giving respect to customer. There is no fault of mine in process and i have become phone-less now. Request your help in this matter.

Regards
venkat