Don't worry, the command line does not override your CLASSPATH setting. What is under E:\ABC\classes ? Your java files ? With your command line, I expect to see something like E:\ABC\classes\com\example\model. Are your source files there ?
Another thing, is this a typo ? "package com.exampe.model not found". The "l" in example is missing.
If command line does not override the CLASSPATH setting, then why it is the case that I am getting "package javax.servlet not found" when I am specifying -classpath option in the command line and I am getting "package com.example.model not found" instead of "package javax.servlet not found" when I am not specifying the -classpath option.
I have put my .java(helper classes, not servlets) files in E:\ABC\src\com\example\model and my .class files for these .java files are in E:\ABC\classes\com\example\model
Oops, apologizes. It will override your environment variable. You'll have to use one or the other. Look at this FAQ, and set the current directory "." in the CLASSPATH too. Then compile from the root of your source directory.