You have no contract with these people. You cancelled it and were refunded. Distance Selling Regs do not apply. There is no returns period. If they want to come and collect their property, they are more than welcome to do so at your convenience.
Personally, I would have phoned them immediately and paid up, as I actually wanted the goods. However, if a company got snotty with me because they had ballsed up and sent me an item I had cancelled, I would be highly tempted to make life inconvenient for them by only offering them the option of coming and getting it. I’d write to head office making this clear so that I have a paper trail of ‘doing the right thing’.
I suspect they do not want it back under any circumstances, hence the insistence that you are in some kind of contract with them and need to cough up the cash.