Does the manifest file in META-INF folder has any significance with respect to deployment ? I could not get where it is being used.

When WAR/EAR is created this would be automatically created by the build tool ?

Manifest is the link point between enterprise tiers, e.g. if your EAR is made up of 3 WAR and 2 JAR, then that dependency is written in Manifest. it is extremely critical while deployment.