If you don't voluntarily refund or respond to the case, Ebay will deduct the payment from your funds along with a charge of £16.80.
All the details are here - to challenge the dispute you would need evidence of delivery.
Do you honestly believe a buyer would bother to pursue this with their payment provider if they had received the item?
https://www.ebay.co.uk/help/policies/selling-policies/payment-dispute-seller-protections?id=5293&st=...
"There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true.”
Søren Kierkegaard, Danish philosopher (1813 - 1855)
