I told him that I will refund you via paypal so that my rank is not hurt is it right to do so as he ordered wrongly
That is a violation of the Terms of Service. You will find them at the bottom of the Fiverr main page. Suggest you read them so as not to put your account at risk.
You are not allowed to refund directly through PayPal.
Don’t do it! That’s against terms for sure. As far as bad reviews are concerned…you’ll live. Just move on and get more orders and great reviews to cancel out the bad one.
Honestly since your first thought was how to beat the system, maybe you should do that. We have enough scammers here already.