lucreate with Solaris 10 lu package fails as it fills up root file system

What kind of data? When you say it fills up the root file system do you mean of the BE or the ABE? How big are the file systems on the BE and the ABE?

ABE root file systems gets full with data from of file system create from externally connected storage systems. At the end it fails with the messages no space left.
Making the ABE <Solaris10> bootable FAILED.
Unable to make boot environment <Solaris10> bootable
Unable to populate file systems on boot environment

ABE root file systems gets full with data from of file system create from externally connected storage systems. At the end it fails with the messages no space left.
Making the ABE <Solaris10> bootable FAILED.
Unable to make boot environment <Solaris10> bootable
Unable to populate file systems on boot environment

That really doesn't tell me anything more. The ABE root should be at least as big as the BE root. I don't understand at all what you mean by "data from of file system create from externally connected storage systems".

We have data file systems created using SAN connected storage. The root file system of ABE is of the same size as of current BE.  We have applied LU packages from solaris 10 cd on current BE which is solaris 8. Now while creating ABE using lucreate it fails. On closer looks we found that in the root of ABE, it has created directories and is filling up with data from SAN storage file system. Also please note we have commented out all the enteris in /etc/vfstab pertaining to external file systems.

You still haven't said what the data is.  Does this same data exist in the BE root fs? You say "it', but what is "it". Is it the lu processes? When you create a ABE, it is pretty much a copy of the current root fs. If the data is not in the root fs, do you have any idea how it gets there?  Is it possible that you have an application running that writes to any mounted fs? I am afraid you are not giving much to go on here.

What I mean with it, is the data of the external file systems gets copied to root file system of ABE. On closer look I noticed that it has created directories in root of ABE. Application is running and is writting to mounted FS while ABE creation is on.