Paypal NVP REFUND API getting Error 10007 - paypal

Question

I am trying to refund the amount using the paypal nvp. And I am getting the following error
[TIMESTAMP] => 2013 04 06T13 48 19
[CORRELATIONID] => aac23709cc94a
[ACK] => Failure [VERSION] => 51 0
[BUILD] => 5618210
[L_ERRORCODE0] => 10007
[L_SHORTMESSAGE0] => Permission denied
[L_LONGMESSAGE0] => You do not have permission to refund this transaction
[L_SEVERITYCODE0] => Error )
What is that I am doing wrong?
I have set the api keys of the emailid to which payment is made
Please let me know what is problem and how can I make refund work.
Code
$API_Endpoint = "https://api-3t.sandbox.paypal.com/nvp";
$version = urlencode('51.0');
$API_UserName = 'example';
$API_Password = 'example';
$API_Signature = 'example';
$API_Endpoint = 'example';
$sandboxmode = 'example';
$methodName_ = 'RefundTransaction';
$transactionID = urlencode('example');
$refundType = urlencode('example');
if($partial) {
$amount = 'example';
$memo = 'Refunding the amount ';
$nvpStr_ = "&TRANSACTIONID=$transactionID&REFUNDTYPE=$refundType&CURRENCYCODE=$currencyID&AMT=$amount&NOTE=$memo";
} else {
$nvpStr_ = "&TRANSACTIONID=$transactionID&REFUNDTYPE=$refundType&CURRENCYCODE=$currencyID";
}
$currencyID = urlencode('CAD');
$API_Endpoint = "https://api-3t.sandbox.paypal.com/nvp";
$version = urlencode('51.0');
$ch = curl_init();
curl_setopt($ch, CURLOPT_URL, $API_Endpoint);
curl_setopt($ch, CURLOPT_VERBOSE, 1);
// Turn off the server and peer verification (TrustManager Concept).
curl_setopt($ch, CURLOPT_SSL_VERIFYPEER, FALSE);
curl_setopt($ch, CURLOPT_SSL_VERIFYHOST, FALSE);
curl_setopt($ch, CURLOPT_RETURNTRANSFER, 1);
curl_setopt($ch, CURLOPT_POST, 1);
// Set the API operation, version, and API signature in the request.
$nvpreq = "METHOD=$methodName_&VERSION=$version&PWD=$API_Password&USER=$API_UserName&SIGNATURE=$API_Signature$nvpStr_";
// Set the request as a POST FIELD for curl.
curl_setopt($ch, CURLOPT_POSTFIELDS, $nvpreq);
// Get response from the server.
$httpResponse = curl_exec($ch);