You cant set them higher in vagcom, they can only be set to mot position as such then adjusted accordingly to the legal specifications, so you set the lights in this position with vagcom, then adjust with the 2 white plastic screws in the top of each headlight, then when set correctly you turn of this mode with vagcom.
It can be several things, the levelling motor/s can be fecked, the 2 screws have been turned to much & pulled the threads of the rubber bungs inside the headlights, the levellers could of come of the ball joints bar inside the headlight, could be just wrong position which above will correct, could be broken axle sensor that has told headlights to go up or down dependent on sensor state which is usually broken by suspension work, number of things tbh, some easy to check within seconds/minutes.
& all S3's have xenons standard & have levelling as standard, infact any audi's with xenons will have auto levelling with headlight washers as this is as per law which isnt actually enforced as such, yet, but latest mot done my mate said it would be along with number plates being correct & I believe Khufu can vouch for this as he does this often.