After rejecting the first list of recommended candidates, the Carter administration is renewing its search in fill a vacant federal court of appeals judgeship for New England and Puerto Rico.

In the process, the administration has reshuffled the makeup of the nominating commission to remove some backers of presidential challenger Edward M. Kennedy, and let it be known that it wants the panel to pay "special attention" to Hispanic applicants.

The saga of the search to fill the vacancy on the 1st U.S. Circuit Court of Appeals appears to involve a good dose of the politics President Carter promised to avoid when he set up the nominating commissions to carry out his campaign promise of using "merit" alone to pick judges.

The Carter-Kennedy feud over the seat has been simmering since last summer, when the White House made it clear that the commission's first unanimous choice, former Watergate special prosecutor Archibald Cox, wasn't acceptable because he was too old.

Kennedy and his aides reportedly felt that the age issue was just an excuse for disqualifying Cox, and that the real reason was to take a slap at Kennedy.

Last Friday, the Justice Department issued a three-paragraph press release to announce the panel would try again.

Kennedy responded yesterday that "it makes a travesty of the judicial selection process to engage in this sort of charade to avoid the appointment of Archibald Cox, one of the most distinguished and capable and honest people in America's public life."

Kennedy wasn't the only one using the term "charade" to describe the work of the reactivated commission.

Thomas G. Hughes Jr., administrative assistant to Sen. Claiborne Pell (d-R.i.), said yesterday that Attorney General Benjamin R. Civiletti told the senator that candidates from his state would be considered for the post, but that the administration intended to find a Hispanic for the job.

"There aren't a lot of Hispanics in Rhode Island," Hughes said. "It would be better for them to just say they're looking for someone from Puerto Rico, istead of going through this charade."

Justice Department spokesman Robert M. Smith confirmed yesterday that Civiletti had asked the new commision chairman to "give special attention to applicants of Hispanic origin."

Civiletti has been especially sensitive to the treatment of Hispanics since they opposed his confirmation as attorney general last summer on the grounds that he ignored a series of police brutality cases.

Smith pointed out that an increasing proportion of the caseload of the 1st Circuit consists of appeals from the district courts in Puerto Rico and that Puerto Rico Has never had a seat on court.

After turning down the recommendation of Cox last summer, Carter administration officials floated the name of Miriam de Rodon, a law professor in Puerto Rico, for the vacancy.

But it was soon reported that she had been rated unqualified by the American Bar Assocation, so her name was dropped.

Doug Huron, of the White House counsel's staff, said yesterday that he didn't find Kennedy's comments about the reactivated commission new or surprising.

He said the changes in the commission "are not a case where we tried to load it up with active, identified Carter supporters."

He declined to say why four members were dropped from the panel, however. They included Richard Donahue, a Boston lawyer who managed Kennedy's Successful New York primary upset of Carter last Tuesday, and Daniel M. Keyes Jr., of Springfield, another longtime Kennedy supporter.

Donahue said in a telephone interview yesterday that he didn't have any personal complaints about being bumped from the commission, because he had publicly criticized Carter's failure to appoint Cox.

But he said he was outraged by the appearance of manipulating the makeup of the commissions for political purposes. "It's extremely important that we don't have suspicions about the process for selecting judges," he said.