The problem is reflected in the feedback, here:
"I am still awaiting a returns postage label from eBay so I can return and get my money back."
Let me elaborate:
It has to do with how the actual ebay code works, most of these cases are solved by programming algorithms (bots as some would call it) and thus the results are usually very black or white.
That having been said...
Your item's returns policy states "No Returns Accepted."
I believe the problem is that with these particular policies ebay does not automatically issue a label as it would with a regular returns policy, the seller must instead follow a work-around procedure. So the buyer is not lying, there simply was never a label issued.
Either that...
Or the buyer is simply stalling with the actual return because ebay's MBG (Money Back Guarantee) does not require the return to be completed in order for the algorithm to issue the refund.
In the end however it doesn't actually matter which, the fact this refund was issued does mean that ebay had to step in and force the refund, so to speak... That means you also have a defect for this trouble, but what matters here is this buyer is most likely not returning the merchandise (and most certainly not without a label). Whether the failure of the return is intentional can not be determined, one way to take this another step forward is to get a return label to your buyer some kind of way, and see if that "frees" up the item to be returned. Beyond that you would more than likely have to pursue this matter through legal channels if you wish for this to be resolved another way than present; whether the cost in terms of finances and time is worth that is something only you can decide.
I know this probably hasn't been very helpful, I am sorry for that, I want to be honest and transparent with you because I do not believe that sugarcoating helps much either.
Peace be with you
