I have 1 point shapefile and I want to extract out all those points which are within 10 feet of each other and then have to form separate lines out of them. How should I do this ?

NeighbourFinder would be a good transformer to start with

http://docs.safe.com/fme/html/FME_Desktop_Documentation/FME_Transformers/Transformers/neighborfinder.htm

A possible workflow using the NeighborFinder as suggested is shown below. Note this assumes that the coordinate reference system units of your data are feet, otherwise a conversion to the search distance value in the NeighborFinder will be required.

I tried this, but result is not coming, i tried to create 1 unique Id as well before giving the input in the neighborfinder