I am not a powerseller but here's what I could understand. The price slab for powership is quite complicated. If you are selling an item for more than Rs 500 then it doesn't matter if the weight is under 250 grams, the item will be considered under the 500 gram weight slab that too for Rs 500 above.
Similarly what I can understand is that Ebay doesn't offer COD for items weighting less than 500 grams. If your item is under 250 grams and you received a COD order then Ebay will charge you for the weight slab of 500 grams.