Hello Sridhar,
ZMIN is not a SAP standard condition type. It is usually a good approach to show your settings from V/06 to avoid misunderstandings.
You mentioned a user exit (not a VOFM routine) to determine whether ZMIN is applied or not in the order. If your system is heavily customized, have you checked whether somebody applied alternative logic in RV61AFZA, for example in userexit_pricing_copy?
As the issue is reproducible in a DEV environment, I am sure that you can solve the issue by yourself by checking how exactly pricing is updated in the document - there is an excellent blog on the subject Pricing Programs and their logic - Help for debugging. It is not very easy to read, so before going through the content I suggest to check the explanations and examples from sap note 24832 - Pricing rules/TVCPF. If you are not comfortable with reading ABAP code or with debugging, you can probably ask a colleague from your development department to assist you. This will be a much faster way to figure out where is the problem, because the most likely cause is custom coding.