Maintaining optimal tip clearance or tip gap is challenging in the Gas Turbine Engine (GTE). Meanwhile, the rotor blades should not rub the casing. When the capacitive sensor is used to measure the tip clearance in the form of a single peak signal for every blade pass, often the signal will be affected by stationary and non-stationary noises during engine running. This leads to distorted multiple peaks for every blade pass. In this work, the wavelet denoising technique removes the noise, and then the peak frequency in each blade pass is detected through a short-time Fourier transform (STFT). Finally, the cubic spline interpolation technique is employed to obtain the continuous time domain blade pass signal. This work uses the compressor stage of GTE data collected from the Gas Turbine Research Establishment (GTRE), DRDO, Bangalore. From the experimental analysis, this paper observes that the proposed methodology produces substantial results compared to the expected results.