If it was worth $120 then the buyer would need to pay VAT plus the collection fee on the item, so attempted delivery is probably the incorrect status but Aus Post's website often has that incorrectly because they don't seem to have a status that means awaiting payment of VAT etc - this could also be the reason the buyer is claiming INR right after the status of attempted delivery, because they don't want to pay it and think they can just get a full refund by saying they never got it (it wouldn't be the first time, unfortunately  ).

In this case, although the MBG does clearly state that the buyer does not have protection (because they are essentially refusing delivery), I wouldn't trust the automated system to decide it correctly, so I recommend getting in touch with eBay by phone (use the call me back option), explain the situation and make sure an actual human sees that the item has arrived and is awaiting the buyer's collection. I wouldn't mention the VAT thing for fear of confusing the rep, lol, just point out that the MBG states the buyer is not covered because delivery has been attempted, and that the buyer can simply contact Royal Mail to make arrangements to collect their item.