If you mean
File.Exists[
^] rather than File.exit (which I've never heard of) then the most likely reason is that the user under whom your application is runnign does not have sufficient access persmissions to look at the file:
"true if the caller has the required permissions and path contains the name of an existing file; otherwise, false. This method also returns false if path is null, an invalid path, or a zero-length string. If the caller does not have sufficient permissions to read the specified file, no exception is thrown and the method returns false regardless of the existence of path." -- MSDN
If you don't have permission, you will have to either elevate your application, or run it under a user who does have access - depending on what your application or service is intended to be doing.