I was able to fix the font embedding issue by saving the XDP as Dynamic XML Form (PDF) and used this as an input for FormsService. That solved the Issue of Embedding Fonts on Individual PDF's.
However while using the assembler service to merge XDP's which has fragments to a hostXDP, I am not able to embedd fonts on the resultant PDF.
What I have already tried:
1. Updated the XCI file with embedd field updated to 1 from 0 on the PDF Tag.
2. Referrenced the XCI file and Fonts on the AdminUI for output and Forms Service Settings.
Ay help with Merging XDP documents with fragments to retain fonts will be useful.
Cheers
Mahesh Krishnan