Association are not created when codebase is file based (file:///) where as if the codebase is http:// association is working fine.

Example:
<jnlp spec="1.0+" codebase="file:/D:/JavaFXAutomation/IntegrationService/jnlp" href="HasAssociationMimeAndFileExtn.jnlp">
    <information>
        <title>HasAssociationMimeAndFileExtn</title>
        <vendor>Raghu Nair</vendor>
<description>Association Test</description>
  <description kind="short">Assc Test desc</description>
        <offline-allowed/>
<association extensions="abc" mime-type="application/abc-mime"/>
    <association extensions="xyz" mime-type="application/xyz-mime"/>
<homepage href="http://java.sun.com/products/javawebstart/demos.html"/>
    </information>
    <resources>
        <j2se version="1.5+"/>
        <jar href="jar/is.jar" main="true"/>
    </resources>
    <application-desc main-class="is06.HasAssociationMimeAndFileExtn">
    </application-desc>
</jnlp>