Is it possible for a java applet to execute system commands on the victims computer?
No. It's not possible without the victim's permission.
Why would you do this anyways? It looks like you're writing a virus from your three posts.
You can sign the Applet and be able to do essentially all things you can from a normal java application. A signed applet will show a popup when the applet is loaded and ask if the user gives the permission.