Can't upload .XML file(500 Internal Server)

I just bought a theme from themeforest.com and was trying to install its demo content but It’s doesn’t upload. On the first try it keeps uploading and after several minutes it gives me 500 Internal Server error. One the second attempt it does upload but only to say that all the files that you’re trying to upload already exists.

I have changed the value of PHP limit in .htaccess and also in wp-config but nothing happens. File size is only 500KB, I thought maybe there’s an error in the .XML files but for other people it just works fine.

I tried uploading some other demo content files too from other themes but no luck.