I haven't used serial IO at all in that program. I am not writing to/reading from SBUF.

I have neither enabled nor disabled the serial IO.

Atmost, we can disable the serial port interrupt (ES bit in IE SFR). But we are directly manipulating the TxD and RxD pins. so how will the receiving device (PC in my case) know whether if the data on TxD and RxD is due to Serial Transmission or other reason?