Hi Sunny,
I realize this might not be in time to help you but I just ran into the same issue. There is an enhancement section within enhancement spot ES_SAPFV45C that you can use to resolve the issue of the rebate condition not being copied from the billing document to the returns order. At the end of include FV45CF0K there is a call to the function PRICING_COPY. You will see that the standard call has a parameter REBATE_CHECK = 'X'. If you replace the call to the function (via the enhanecment section) and send REBATE_CHECK = ' ' (space) then the rebate conditions on the billing document will be copied to the sales return document regardless of the rebate agreement status. So even if the rebate agreement is settled it will still be copied. Of course you have to make sure that the rebate conditions are not redetermined. This is controlled via the Pricing Type used in the billing doc to order copy control config (tcode VTAF).
I hope this helps!
Regards,
Meghan