Hi sansindia85,
The action setting is not necessary for Ajaxuploader. Try the setting below in your web.config <appsettings> section.
<add key="CuteWebUI.AjaxUploader.RewritePath" value="False" />
If does not work for you. Please send us the uploader test page url which does not contains the action setting. So we can check it.
Regards,
Ken