What is Double Spending and How it can happen?
Since when we send the BTC payment it deduct the BTC amount from the balance. If so how it can happen?
It is a type of exploit. The person sends funds without a transaction fee, then sends again with a fee. The transaction with the fee will get confirmed and the other will eventually get rejected by the network. It can also happen if a mining pook has then 51% of the global hashrate. They would technically be able to chose which transaction were confirmed and which weren't.
But if the network rejects the transaction, then the funds should get returned to the sender. Eventually it will become a scam as the receiver will be waiting for confirmations which will never get done. Am I correct?
One of the either transaction should get confirmed and the other will get forgotten. Both of the transactions should be broadcast at the same time. However, it is pretty hard since nodes will not include the other into their mempool once they see the transaction spends the input that is same as the other transaction. You can still broadcast one of the transaction to 50% of the nodes and another transaction to other 50% of node.
If you make a payment but include 0 fee and have a dust output then perhaps, it won't get confirmed either. I doubt merchants would accept these kind of transaction unless they can't wait for a few seconds or check for competing transactions.