Buyer never received item, was returned to sender 7 months later

I'm wondering if anyone on here has ever encountered something similar to this and what they did....seven months ago I sold an item to someone in Israel. It never arrived and after allowing a very generous amount of time they opened a case against me. eBay ended up siding with me and did not refund the buyer. I felt bad, however the buyer was a new account with no feedback and I had no way of knowing if they were genuine or a scammer. Well, SEVEN months later I was amazed to see the package had been returned to me and the buyer was being honest after all. There is no indication on the package as to why it was undeliverable. Since I can resell the item now, I'd be happy to refund the buyer the cost of the item less the shipping costs. I don't see how that is possible though after so much time and I know I don't have any obligation to do so other than a moral obligation. I just feel bad someone paid a lot for this and never received it. Does anyone have any advice?

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Curious as to how/why eBay sided with you if the item was not delivered.