Hi Gayathri
I am using CW11, PE multilink universal and the 56F8367. It work perfectly on our board (not a demo board).
From the message you got it looks that there is a communication between the PC and the PE unit, but not with the target board. Do you have an external watch-dog that might interfere the JTAG communication?
If it is not commercial confidential, maybe you'll send me your drawing and maybe I'll be able to locate the problem cause.l