Then the seller did not send it as a refund, they sent it as a payment and so paypal saw you as the seller.
Refunds are only available up to 180 days BUT if its after that the seller can still 'send' a refund but using the friends/family option so there is no fee for you as long as that option is available in your country.
You would need to sort it out with the seller.
Advice is voluntary. Kudos / Solution appreciated.