Hey ApoorvaJ,
I went back into my project and tested the issue again making sure to stretch the meshes. I was able to successfully reproduce the issue you are reporting and took the liberty of creating a bug report (UE-13213). Thank you for being patient while we test the issue on our end, and for the provided information needed to reproduce.
Just to clarify, the answer I provided before this one should have resolved the original issue you reported about seams on instanced static meshes. Since you are aware of the issue just reported, I would suggest not scaling Instanced Static Meshes non-uniformly until a fix is implemented.
If you have any other questions or need additional assistance, please do not hesitate to ask.
Cheers,