EvilC, Thanks for your replies.
From http://kb.adobe.com/selfservice/viewContent.do?externalId=kb402005 , it is clear that if you have timezone information present it must decode it properly.. Because what they say is "If no timezone information is present, local time is assumed." . But in my case the timezone information is present. But, maybe http://www.adobe.com/support/documentation/en/flex/2/releasenotes_flex2_fds.html answers the question.
