Hi Muni,
Please check the following settings:
1. SPRO-->SAP Implementation Guide-->SAP Supplier Relationship Management-->SRM Server-->Technical Basic Settings-->Define Backend System for Product Category - Source and target system should be your backend ECC system
2. Table COMM_CATEGORY field LOGSYS is your back end ECC System
3. In Org Structure for the user's position, under extended attributes-->Product Categories user has product categories or * maintained with correct Src. System i.e. again your back end ECC system and Deactivated is NOT checked.
If all looks good, you can try debugging function module COM_PRODUCT_CATEGORY_GETLIST to check why and where the product categories are wiped out.
Thanks,
Anubhav