The formulation for the exact number-conserving treatment of the BCS-TammDancoff approximation (NTDA) in deformed even nuclei is given. It is applied to the K'*=0-octupole vibrations of rare-earth nuclei and is also compared with the ordinary TDA or RPA method based on the Bogoliubov transformation which has the defect of mixing of the particle number in the wave functions. The excitation energies and B(E3) calculated by NTDA method show rather stronger dependence on the Nilsson orbits than those calculated by the usual TDA or RPA methods, especially at N= 94 nuclei.