Hello Ullas
iam facing same issue can u please update soon.
Category for service category MECH does not exist
Message no. COM_PRODUCT_API004
Diagnosis
Before services are imported from the SAP system, service categories must exist as categories in CRM/EBP. When the Customizing object DNL_CUST_SRVMAS is imported, the service categories are imported automatically and created under the category SRV in the category hierarchyR3PRODSTYP (product subtype).
Procedure
Check whether the service categories have been imported successfully and exist as categories.
Proceed
If necessary, import the Customizing object DNL_CUST_SRVMAS.
Regards
Chinna babu