Simply not true. Ignition only needs local privileges to run, and that is all it gets when running as the default LOCAL SYSTEM user.
The service also has no connection to what you do on the desktop as far as networks are concerned, so your testing in the terminal is insufficient.
Instead of using system.util.execute(), which is
fire-and-forget, use java's ProcessBuilder so you can collect the output and error streams from your batch file's execution.