Yes, it is fine as long as you are careful of how much you sand off. It will usually take more than the normal 2 or 3 coats of clear in order to have enough to work out a smooth finish. In other words spray on more clear than you need in order to have enough not to sand down to the color. Be careful not to spray so much at one time or you will get runs.

 

paintscratch .com sells the kind of rubbing compoud you need, and also has good how-to directions on their site for compounding/buffing clearcoats.