Hey akshay,
We should first make sure this step's VI is being included in the build. If you look on the Distributed Files tab of the Deployment Utility, can you find the VI in the list?
Also, one thing we can do to test this is run the test system from the deployment image. When you create a deployment, TestStand creates both an Installer (for the target computer) and an Image. The image folder allows you to run the sequence on your development computer as a final check before deploying to another system. You can use the Sequence Editor to open the sequence file from the Deployment Image location, and this will allow you to see the paths it is using for your VIs. It might give us more information about the problem. Could you try running the sequence from this location as well?