Shweta:
I'm not sure what may be causing your issue, but I have some advice.
I have stopped using MS-Excel documents as a source to a live map service. ArcGIS Server will lock your Excel document and you won't be able to modify and save anything in your table as long as the map service it is connected to is running. Instead, I use a table in a file geodatabase or a table in MS-Access. Using a table in a file geodatabase or a table in MS-Access allows you to add/subtract records or modify cell values while the map service is live.
Joe