Hi Rachit,
You don't need to place those files in EPS/In directory, Just maintain the downloaded files and xml file
in one directory and give the path of the xml location when sum prompts as shown below Image may be NSFW.
Clik here to view.
I am stuck in the same situation, trying to update Basis(KB74008.SAR) and Aba (KA74008.SAR) packages from SUM (latest version) and copy the .SAR file in EPS/in and try to upload the same in SUM, and getting the error: Incorrect input; provide the correct path to the directory.