Application of Carnoy's solution for more than two minutes can cause damage to the inferior alveolar nerve, but it is hard to decide whether this damage is the sole effect of the solution or due to the enucleation of the cyst. Animal studies such as Frerich et al. 1994 and Loescher and Robinson 1998 confirmed the detrimental effect of the solution on the neural tissue after 2 minutes application. 

Dear Amel... first you should squeeze the gauze (soaked by the solution) then the nerve should be covered by a wet gauze (normal saline) then you should have a good assistant to reflect the nerve and the covering gauze.. Apply the gauze soaked with the Carnoy's solution for not more than 2 minutes.. its odor is so strong and it may be toxic so try not to breath it as u can... with best regards

you can cover the exposed nerve by using bone wax and then apply Carnoy's soln. This will prevent damage to inferior alveolar nerve.