Tough lesson to learn here. Do your research before purchasing something. If you saw the exhaust via FaceTime you could have atleast noticed something wasn't right. A simple Google search would have told you what to look for to check the items authenticity. As it's been said a million times "if it seems too good to be true...it probably is"
Also I'll gift money for cheaper items as the odds of being scammed aren't as high. Anything of value I'll pay the extra fees for the reassurance. As it's been mentioned I don't think Paypal's going to want to do much when go to them and say "so I sent payment for a product as a gift to avoid your fees, now I've been scammed, protect me please?"
Reminds me of how people were dumb enough to send money via Western Union for ebay purchases. By people I mean me. Damn I was stupid when I was 16. Still get sick to my stomach thinking someone got my money and literally sent me nothing
EDIT: not at all taking sides. As it's been said neither side has really given enough evidence to decide who's lying. However the OP is probably out the cash regardless due to sending the money as a gift. For his sake I hope he got the PE exhaust and it just wasn't what he was expecting.