Where do I stand with item & Seller??
I think you mean the buyer? You seem to be having an identity crisis!
If you're very lucky, the buyer will offer to pay to have the item reposted.
If you're not, they will either expect you to resend it at your own expense, or demand a refund. They are entitled to this, as the parcel was not "successfully delivered" as eBay requires.
If the latter, the best way to refund them will be to ask them to open an item not received case under eBay's money back guarantee, through the resolution centre. This won't count against your seller performance rating provided you click on the option to refund the buyer. That way eBay will process their refund through the case and you will receive a credit for your final value fee. (PayPal fees are no longer refundable.)
An easier way, if you're on good terms with the buyer, would be to send them a cancellation request through the resolution centre, citing problem with the buyer's address as the reason. As above, eBay would process the cancellation and deal with the refund and the return of your selling fee. But if they wanted to be awkward, the buyer could refuse this request.
