First thing I wann ans to this imp question: "Why we require PATH To be set?"
Answer : You need to set PATH to compile Java source code, create JAVA CLASS FILES and allow Operating System to load classes at runtime.
Now you will understand why after setting "javac" you can manually compile by just saying
"Class_name.java"
Modify the PATH of Windows Environmental Variable by appending the location till bin directory where all exe file(for eg. java,javac) are present.
Example : ;C:\Program Files\Java\jre7\bin.