Kindly explain cenvat in this example

Question

Dear experts,
I am an abapper.Recently i have a requirement to work on a cenvat report.So i am set forth to know what is
cenvat first and i am more confused.
I take this example here
Manufacturer ---> Purchase raw material -> Make finsih product -> Sale to customer.
Say i am Manufacturer A,i buy three materials
                 Purchased from
Cotton    -  Vendor A
Dye        - Vendor B
Plastic    - Vendor C
                        Value              Basic Excise Duty Payed        
Cotton               100                          8
Dye                     50                          4
Plastic                 25                          2
Now what i understand is that i can claim Rs ( 8 + 4 + 2)  from govt.
Is it that excise duty you pay is claimed by govt ??.Am i thinking correctly.
Basic definition of excise duty wrt cenvat  tells
In India , Excise duty is a tax on the manufactured goods that is levied when goods leave the  place of manufacturer . Manufacturer can set off the duty paid on input materials against their  output duty , this procedure is known as central value added tax [CENVAT ] .
Now output is that i make a toy from cotton ,dye ,plastic and set the price for customer  = 1000
                                                                                BED          = 80
First Question:
How can i exploit cenvat here being manufacture.In other words ,how can i take advantage of cenvat. ?
Second Question:
What i need to settle with government here ?
Plz help me.

Answer 1

For input u have register RG23A/C whener in u have ure input values this the the value that u have paied to Vendore and u have to recive it form govt
whene u produce a good and sell it to custyomer then ther is rge RG1 where u show the qty solved and value
this is value that u have collected from customer and need to pay to govt
so actuallt u need to pay the diffrence of both collect and paied
and this is done thorught tcode J2IUN
advantage is the what even u have pade to vendor that u can set of aganst what u have collected for customer
hope this helps
14 is ur input
80 is ur output
so u have to pay to govt 80-14 u do this is J2IUN