Should you completely get rid of your temptations or do them in moderate amount? So, I am preparing for this really important exam that requires me to give maximum time to studying and lately, I have found myself addicted to this television series. Although I study during my study time very sincerely, I have begun to realize that watching that television series eats a good amount of time in my daily schedule. 

I don't know if I should completely cut it out of my schedule, which according to me might make me crave for it even more or I should watch it only in specified time of the day. If I do the latter, I am afraid, I might lose concentration because those scenes sometimes just keeping running in my head, and also I might just end up watching it for longer than I should.

What should I do? Will cutting it out completely make me crave for it even more? Or is specifying a time for it a good idea? What does psychology say?
The problem you are experiencing is called procrastination. You get suddenly very interested in TV shows as a way to avoid the task which is currently generating anxiety.

The relation between a goal (here succeeding in this important exam) and procrastination is well documented (e.g. Bandalos et al. , 2003, in the context of statistics courses). There are two types of goal one can have: Achievement goal (desiring to succeed on an exam, for example) and mastery goal (wishing to understand the content of the course). Sadly, only the first one generates anxiety. Many research found that a desire to understand, not necessarily to succeed, diminishes the procrastination behavior. When procrastination is absent, it also makes us immune to anxiety. Finally, anxiety, when present, tends to produce weaker grades.

(in technical terms: performance goals is positively correlated with procrastination; procrastination is positively correlated with anxiety; anxiety is negatively correlated with the grade obtained; however, mastery goal is negatively correlated with procrastination).

One solution is to set study times, have a schedule for study and a schedule for TV watching, and stick to it. When it is time to study, do nothing else. At first, it will be hard, but in the long run, you will adopt the right automatisms, and study will become easy. Be realistic when setting study times. For example, avoid long study period that are unrealistic. Better have many short periods of two hours and stick to it, rather than a few periods of many hours that are not humanly realistic.

So to answer your question: Your second option is the correct one: determine time slots for study; outside of those times, watch TV if you wish. Your explanation was not correct: it is not craving which makes you watch TV, it is anxiety.

Bandalos, D. L., Finney, S. J., &amp; Geske, J. A. (2003). A model of statistics performance based on achievement goal theory. Journal of Educational Psychology, 95(3), 604-616. doi:10.1037/0022-0663.95.3.604