Edit the -Xmx parameter in standalone.conf(.bat) and add more memory. If it doesn't help you have to track down the *real* problem ;-)
If you use domain.* to start you need to change the configuration of the domain.xml or host.xml.
If you start the server via jboss-tools out of eclipse you need to change the parameter here.
Sorry for the late reply. Problem has been resolved. I removed all the wars in the deployments folder under (jboss\jboss-as-7.1.0.Final\standalone\deployments) except readme.txt and ran a maven- clean and ran a project "build" and "deploy" .It solved the issue.