For Windows 7, I\'ve installed JDK in both 32 and 64 bit versions. The versions are 8, update 20 for all four installations.
http://www.oracle.com/technetwork/java/javase/d
I was facing similar issue where Java home is already set but still it was throwing error.
Open elasticsearch-plugin.bat file and change "IF DEFINED JAVA_HOME" to "IF DEFINED %JAVA_HOME%" , if you have java home already set.