classpath not path ... and you don't need it as an evironment variable.
You can set the classpath for javac with option -cp or -classpath (several other ways are also available).
javac uses the environment variable CLASSPATH to look for classes, that can be useful and can also be a source for hard-to-track-down-problems.
An example to compile a java file that uses a library(that is classes from outside the standard JavaSE) would be:
javac -classpath C:\apache-tomcat-7.0.23\lib\servlet-api.jar MyTestServlet.java
if your environmental variable CLASSPATH contains libraries you need you might want to do:
javac -classpath %CLASSPATH%;C:\apache-tomcat-7.0.23\lib\servlet-api.jar MyTestServlet.java
(please be aware that I don't have access to a windows machine, and therefore haven't tested the idiosyncratic parts of the syntax above)
(also note that in this example "C:\apache-tomcat-7.0.23\lib\servlet-api.jar" is a jar file and not a directory which it might be from your question on your machine)
For command line compiling on windows OS it is a good idea to have the environmental variable JAVA_HOME set correctly and the bin directory of the JDK in the PATH.
I do however suggest getting to write-compile-execute-deploy via/in an IDE for servlet development before figuring out how to do it with just the JDK from a command line.
Java Servlets are not stand-alone executable classes but needs to be deployed into for example tomcat to be tested/used.