Found the aws documentation on this,

"Error handling for a given event source depends on how Lambda is invoked. Amazon CloudWatch Events is configured to invoke a Lambda function asynchronously."

"Asynchronous invocation – Asynchronous events are queued before being used to invoke the Lambda function. If AWS Lambda is unable to fully process the event, it will automatically retry the invocation twice, with delays between retries."

So the retry should happen in this case. Not sure what was wrong with my lambda function , I just deleted and created again and retry worked this time.

Judging from the docs you linked to it seems that the lambda function is called again if it has timed out and the timeout is because it is waiting for another resource (i.e. is blocked by network):

The function times out while trying to reach an endpoint.

As a cron event is not stream based (if it is synchronous or asynchronous seems not be be clear from the docs) it will be retried.

CloudWatch Event invokes a Lambda function asynchronously.

For asynchronous invocation, Lambda manages the function's asynchronous event queue and attempts to retry two more times on errors including timeout. https://docs.aws.amazon.com/lambda/latest/dg/invocation-async.html

So with the default configuration, your function should retry with timeout errors. If it doesn't, there might be some other reasons as follows:

1. The function doesn't have enough concurrency to run and events are throttled. Check function's reserved concurrency setting. It should be at least 1.
2. When above happens, events might also be deleted from the queue without being sent to the function. Check function's asynchronous invocation setting, make sure it has enough age to keep the events in the queue and retry attempts is not zero.