It depends on your version of IIS (I'm assuming IIS as you're running Windows Batch files based on your code example). Newer versions of IIS do not allow access to CMD.EXE which is needed to 'interpret' the batch file. This is a new 'security feature' that gave me issues too.

I didn't deal too much with it, just rewrote my batch in Perl, but I understood the only way to get around it was to run the IIS service as "Administrator" - HIGHLY **NOT** RECOMMENDED!!!