Hi again Senthil,
Ok, so the first thing I'd like to know is a bit about your landscape. Presumably these are two different systems, one running ABAP 7.4 and the other running Java 7.4 with ADS enabled, yes? Is your ADS server a dedicated system for ADS, or is ADS running side-by-side with something else, like an Enterprise Portal, etc?
I will say straight up that my recommendation is to give ADS a dedicated server. It usually doesn't have to be very big, unless you are planning to use for high-volume printing scenarios, so a typical VM will usually work. Assuming this is the case, the first place to start is ensuring your AS Java is correctly configured. I've covered the basics for this in a blog I wrote a while back at NetWeaver 7.4 SR2 Java Basic Configuration.
There are any number of blogs out there about configuring ADS (so I didn't write my own to just add one more). A good one is at Configuration of Adobe Document Services.
The basic Note for the sequence of troubleshooting steps in ADS is 944221. Have you gone through this Note?
Cheers,
Matt