ArcGIS 10.2 Geoprocessing Service based on Python Fails with IOError: “SDE” does not exist Failed to execute

I have a Python Script that inserts X,Y Point in the SDE Point Feature Class. It works fine when executed in ArcMap 10.2, but it fails with IOError when published as Geoprocessing Task service in ArcGIS Server 10.2

It does not make sense to me why!?

Any ideas what might be and how to fix it?
Thank You.