Most people in this historic community think of Tom Ottenstein as the man who built a 307-foot steel observation tower overlooking the Civil War battlefield - thus sparking a bitter controversy that pitted him against historians, local residents and history buffs who thought the tower a "sacrilege" on such hallowed ground.

That was three years ago, Time and familiarity has begun to chip away at the old hostility, according to officials of Cumberland Township, where the tower stands. People are beginning to grow accustomed to the sight of the spindly silver structure overlooking the foothills and the rolling plains of the battlefield.

Now Ottenstein, a Bethesda businessman who promoted the tower as an economic boon" that would produce tax revenues for Cumberland Township, has reopened the old wounds by refusing to pay a 7 per cent amusement tax on each $1.75 admission ticket he sells.

The tower, he now contends in a suit filed here, is an "educational experience" rather than an entertainment subject to an amusement tax. It is "something meaningful," he said.

Ottenstein's suit has generated wider concerns here because of the fear that if he wins - all the Civil War museums and battlefield - related amusements will suddnely see themselves as "educational experiences" also exempt from the tax, draining this tourist community of its financial lifeblood.

Ottenstein's move has baffled Cumberland Township officials who had individually endorsed the tower's construction in anticipation of the additional tax revenue for the township.But now, according to one observer familiar with the controversy, the supervisors "have been left holding the bag."

"There's no other way I can look at it (the suit) except as a complete turnabout on Mr. Ottenstein's part," said H. Wayne Cluch, a supervisor, who estimated Ottenstein owes the township in excess of $10,000.

Cumberland officials say they can't understand why Ottenstein suddenly last summer decided to stop paying the tax. He paid it until July, 1976 - a total of $41,461.32 - and didn't inform the township that he was discontinuing tax payments until last December.

The first two years the tower was open, Ottenstein charged $1.50 for adult admissions with the 7 per cent tax included in that price. This year, he raised the price of $1.75.

Ottenstein said he was too busy fighting court battles over the tower (the state had tried several times to prevent construction) to consider the basic fairness of the amusement tax before last year. Before last July, he paid it without much thought, he said.

The amusement tax accounts for 50 per cent of the tax base in Cumberland Township and for 17 per cent of the tax base in Gettysburg.

"We would just automatically stop paying the tax" if Ottenstein is successful, said Treva Weikert, manager of the Prince of Peace Museum, a religious museum located amid the fast food restaurants, hotels and gas stations that line the main street in Gettysburg.

To thwart Ottenstein's efforts, the township Board of Supervisors recently enacted an ordinance providing for an admissions tax to "any place or activity" in the township.

In return, Ottenstein amended his original suit to force the court to decide the legality of such a tax. "They figured they were going to lose so they changed the law," Ottenstein said bitterly.

"I'm no saying a person who visits the tower (called the National Gettysburg Battlefield Tower) goes away with a Ph.D. in history, but he does go away more knowledgable about the Gettysburg battle," said Ottenstien.

Shaped like an hourglass, the tower has four observation decks, the two lower decks are enclosed and the top levels are open. Each level provides a panormaic view of the town of Gettysburg and the battlefield.

Before ascending the tower in a whirring elevator, visitors are given a leaflet that identifies what they can see from the top.

On the first enclosed level are various photographs of Civil War scenes and its famous participants, Lee Grant, Custer and others. There are also dolls, paintings, flags, posters and telescopes.

Music of the Civil War era - lots of drums, flutes and horns - is played continuously on overhead loudspeakers.

The crux of Ottenstein's argument, however, centers on a 12-minute tape giving a brief narrative dramatization of the three days of bloody battle, which is played over and over on the second observation deck.

Visitors, as they walk around the deck, are able to view the portion of the battlfield being discussed then on the tape.

The attorney for the township maintained in a legal brief that the "tower is of limited educational value to the uniformed. . . On the other hand, in terms of entertainment and enjoyment, a beautiful view is provided which pleasurably occupies the sense of sight."

The township's argument also addresses the fact that Ottenstein has two concessions on the tower grounds that sell popcorn, cotton candy, snow cones, hot dogs, hamburgers and soda, and give the grounds an amusement park aura. In a sort of mini-zoo, rabbits, geese and sheep are on view beneath the tower.

When asked whether the tower is educational or amusing, visitors most frequently respond that it's a little bit of both.