Kumar ,
a webserver handles request of type http,ftp ,https...
if you need a dynamic response , say a list of states in a country
based on the selection of the country , is still possible in a webserver.
Servlets can invoke a POJO(Plain Old Java Object) which has the business logic or a database access logic , so that you will be able to generate a dynamic response.
but if you need transaction to be handled based on your request,
if you need more efficient object pooling ,
then these kind of services is provided by APPLICATION SERVERS