Follow the steps below to remove Appointments from a Time Block if the Appointment is resulted as canceled.
• Login as your Admin User and click on 'Setup'
• Click on 'Develop' and 'Custom Setting'
• Click 'Manage' next to 'Appointment Settings'
• Click 'Edit' next to the default record
• Click the checkbox next to 'Decrement Time Block on Cancellation' and click 'Save'
Once the 'Decrement Time Block On Cancellation' checkbox is set to True, Appointments resulted as 'Canceled' will no longer be associated with the Time Block assigned. This will open up a slot for another Appointment to be assigned to the Time Block.