Response not getting encrypted

I have spent the last 2 days trying to find out what the issue actually is,
but to no use. Searched Stackoverflow and other forums still not being to
figure out the issue. I am using the standard apache CXF 2.7.8 version on a
Wildfly 8.1. My WS Policy looks like

I am sending a SOAP request using SOAP UI which looks like

The response from the apache cxf looks like

The server side implementation code looks like below

I can see that the data on the server is being received, decrypted properly,
signature verification done, processed and SOAP Body is also getting
generated properly. Furthermore in accordance with the policy the signed
SOAP header elements are being returned by the apache cxf. But for some
reason the contents of the SOAP Body is not getting encrypted or signed,
which according to policy it should. As you can see from the java
implementation, I have set the "ws-security.encryption.username" property to
"useReqSigCert".

Can any of you please help with this?

Thanks in advance for helping out.