diff --git a/pkg/policymutation/policymutation.go b/pkg/policymutation/policymutation.go
index 2ed877009b..b97255fc98 100644
--- a/pkg/policymutation/policymutation.go
+++ b/pkg/policymutation/policymutation.go
@@ -316,10 +316,13 @@ func generateRuleForControllers(rule kyverno.Rule, controllers string, log logr.
 		MatchResources: match.DeepCopy(),
 	}
 
+	if !reflect.DeepEqual(exclude, kyverno.ExcludeResources{}) {
+		controllerRule.ExcludeResources = exclude.DeepCopy()
+	}
+
 	// overwrite Kinds by pod controllers defined in the annotation
 	controllerRule.MatchResources.Kinds = strings.Split(controllers, ",")
 	if len(exclude.Kinds) != 0 {
-		controllerRule.ExcludeResources = exclude.DeepCopy()
 		controllerRule.ExcludeResources.Kinds = strings.Split(controllers, ",")
 	}
 
diff --git a/pkg/policymutation/policymutation_test.go b/pkg/policymutation/policymutation_test.go
index b9a5f70c7a..19e057fd4e 100644
--- a/pkg/policymutation/policymutation_test.go
+++ b/pkg/policymutation/policymutation_test.go
@@ -21,6 +21,32 @@ func currentDir() (string, error) {
 	return filepath.Join(homedir, "github.com/nirmata/kyverno"), nil
 }
 
+func Test_Exclude(t *testing.T) {
+	dir, err := os.Getwd()
+	baseDir := filepath.Dir(filepath.Dir(dir))
+	assert.NilError(t, err)
+
+	policies, errs := utils.GetPolicy(baseDir + "/samples/best_practices/disallow_bind_mounts.yaml")
+	if len(errs) != 0 {
+		t.Log(errs)
+	}
+
+	policy := policies[0]
+	policy.Spec.Rules[0].ExcludeResources.Namespaces = []string{"fake-namespce"}
+
+	rulePatches, errs := generateRulePatches(*policy, engine.PodControllers, log.Log)
+	if len(errs) != 0 {
+		t.Log(errs)
+	}
+
+	expectedPatches := [][]byte{
+		[]byte(`{"path":"/spec/rules/1","op":"add","value":{"name":"autogen-validate-hostPath","match":{"resources":{"kinds":["DaemonSet","Deployment","Job","StatefulSet"]}},"exclude":{"resources":{"namespaces":["fake-namespce"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":"null"}]}}}}}}}`),
+		[]byte(`{"path":"/spec/rules/2","op":"add","value":{"name":"autogen-cronjob-validate-hostPath","match":{"resources":{"kinds":["CronJob"]}},"exclude":{"resources":{"namespaces":["fake-namespce"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"jobTemplate":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":"null"}]}}}}}}}}}`),
+	}
+
+	assert.DeepEqual(t, rulePatches, expectedPatches)
+}
+
 func Test_CronJobOnly(t *testing.T) {
 
 	controllers := engine.PodControllerCronJob
@@ -44,7 +70,7 @@ func Test_CronJobOnly(t *testing.T) {
 	}
 
 	expectedPatches := [][]byte{
-		[]byte(`{"path":"/spec/rules/1","op":"add","value":{"name":"autogen-cronjob-validate-hostPath","match":{"resources":{"kinds":["CronJob"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"jobTemplate":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":null}]}}}}}}}}}`),
+		[]byte(`{"path":"/spec/rules/1","op":"add","value":{"name":"autogen-cronjob-validate-hostPath","match":{"resources":{"kinds":["CronJob"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"jobTemplate":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":"null"}]}}}}}}}}}`),
 	}
 
 	assert.DeepEqual(t, rulePatches, expectedPatches)
@@ -78,7 +104,7 @@ func Test_CronJob_hasExclude(t *testing.T) {
 	}
 
 	expectedPatches := [][]byte{
-		[]byte(`{"path":"/spec/rules/1","op":"add","value":{"name":"autogen-cronjob-validate-hostPath","match":{"resources":{"kinds":["CronJob"]}},"exclude":{"resources":{"kinds":["CronJob"],"namespaces":["test"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"jobTemplate":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":null}]}}}}}}}}}`),
+		[]byte(`{"path":"/spec/rules/1","op":"add","value":{"name":"autogen-cronjob-validate-hostPath","match":{"resources":{"kinds":["CronJob"]}},"exclude":{"resources":{"kinds":["CronJob"],"namespaces":["test"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"jobTemplate":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":"null"}]}}}}}}}}}`),
 	}
 
 	assert.DeepEqual(t, rulePatches, expectedPatches)
@@ -106,8 +132,8 @@ func Test_CronJobAndDeployment(t *testing.T) {
 	}
 
 	expectedPatches := [][]byte{
-		[]byte(`{"path":"/spec/rules/1","op":"add","value":{"name":"autogen-validate-hostPath","match":{"resources":{"kinds":["Deployment"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":null}]}}}}}}}`),
-		[]byte(`{"path":"/spec/rules/2","op":"add","value":{"name":"autogen-cronjob-validate-hostPath","match":{"resources":{"kinds":["CronJob"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"jobTemplate":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":null}]}}}}}}}}}`),
+		[]byte(`{"path":"/spec/rules/1","op":"add","value":{"name":"autogen-validate-hostPath","match":{"resources":{"kinds":["Deployment"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":"null"}]}}}}}}}`),
+		[]byte(`{"path":"/spec/rules/2","op":"add","value":{"name":"autogen-cronjob-validate-hostPath","match":{"resources":{"kinds":["CronJob"]}},"validate":{"message":"Host path volumes are not allowed","pattern":{"spec":{"jobTemplate":{"spec":{"template":{"spec":{"=(volumes)":[{"X(hostPath)":"null"}]}}}}}}}}}`),
 	}
 
 	assert.DeepEqual(t, rulePatches, expectedPatches)
diff --git a/samples/DisallowBindMounts.md b/samples/DisallowBindMounts.md
index a46f9224fd..8b0d329e86 100644
--- a/samples/DisallowBindMounts.md
+++ b/samples/DisallowBindMounts.md
@@ -24,5 +24,5 @@ spec:
       pattern: 
         spec: 
           =(volumes): 
-          - X(hostPath): null
+          - X(hostPath): "null"
 ````
diff --git a/samples/best_practices/disallow_bind_mounts.yaml b/samples/best_practices/disallow_bind_mounts.yaml
index 43bcbc4185..8c26e27d47 100644
--- a/samples/best_practices/disallow_bind_mounts.yaml
+++ b/samples/best_practices/disallow_bind_mounts.yaml
@@ -23,4 +23,4 @@ spec:
       pattern: 
         spec: 
           =(volumes): 
-          - X(hostPath): null
+          - X(hostPath): "null"