My interpretation of stoppage of increments for four years “without cumulative effect” and “with cumulative effect” is like this. In the former case, the employee will not get any increments for four years but at the end of four years when his increment becomes due, he will get all these increments (4 increments which were kept on hold) together with the 5th year increment at a time. In this case the employee is not at a big financial loss. In the latter case, the employee’s basic salary will be fixed at a lower stage and that will remain the same for four years and after four years is over, he will start earning increments from the stage so fixed. If the basic is reduced to 6050 (lowering it by two increments from 6450) then after four years he will start getting the first increment and next year he will reach the stage he was before awarding the punishment, ie, 6450. With this he is actually losing six years of increments.
Whether you are eligible to write the promotion test or not will depend upon the rules of the state ( I presume this is a case of State or Central service Rules and not a private establishment wherein no such wider interpretations of law is required) and if there is nothing preventing from an employee who has already been awarded a punishment from appearing promotion test, then you can also appear. Sometimes, the rules may prescribe for a minimum period before which one cannot appear for such tests.
Madhu.T.K