H1B Master's cap question

Hi, I am in a very complex situation. Pls. find below. Noone would have ever occured this kind of painful situation.

My wife has an H1B approved for FY2012 in the Master's cap.  But then she left the job and went on H4 on sept 2012 (before the oct 2012 start).  The company sent the USCIS the letter of her quitting the job and they revoked her H1B.  Now she got a job offer and the company applied for the H1b.  She got an RFE saying that " USCIS records show that old petition was counted towards the H1B US Masters degree or higher cap limitation, however USCIS records show that this petition was revoked on Sept 25,2012 and the Federal register vol.69 no.37 states in part that - if an H1b petition was approved in FY2004 (and the approval was counted against the FY2004 cap and the h1b petition subsequently is revoked during Fy2004 for any reason other than fraud or willful misrepresentation (e.g the petitioner goes out of business), that number will be restored to the total number of H1b petition approvals available for the remainder of Fy2004".  Based on this information, it appears that the beneficiary is not considered to have been "counted" towards the congressionally mandated h1b limitation or "cap".  Therefore beneficiary is subject to the H1b cap numerical limitation.  The cap for the present fiscal year has already been completed. Accordingly it does not appear that the present petition may be approved.



Even my attorney says that USCIS has made a mistake here.  But I did my own research could not find any USCIS or federal register document where it says that , Even if the petition is revoked, the approval of old petition can be used for successive H1b petition.  Also I did find the [b]INA Sec.214(g)(7), 8 U.S.C 1184(g)(7); 8 CFR 214.2 (h)(8)(ii)(A)[/b] where it says that " if Any alien who has already been counted, within the 6 years prior to the approval of a petition described in subsection (c) of this section, toward the numerical limitations of paragraph (1)(A) shall not again be counted toward those limitations unless the alien would be eligible for a full 6 years of authorized admission at the time the petition is filed.  Where multiple petitions are approved for 1 alien, that alien shall be counted only once." but then it also says in part (5)(C) that “The numerical limitations contained in paragraph (1)(A) shall not apply to any non-immigrant alien issued a visa or otherwise provided status under section 1101(a)(15)(H)(i)(b) of this title who has earned a master’s degree or higher degree from a United States institution of higher education (as defined in section 1001(a) of title 20), until the number of aliens who are exempted from such numerical limitation during such year exceeds 20,000”



So my question is does it mean that only the H1b approval counted towards "65000" regular cap limit can be used but the one counted towards "20000" master's cap is not considered to be counted towards the so called "numerical limitation" or "Cap" because it is considered to be "cap exempt from 65000 quota" and hence is subject to the "cap" in the future H1b petitions even if the approved h1b petition is in the past 6 years.  can anyone give me a link to the USCIS or any other federal document that can help me in solving the above query.



Thanks,



Kunal.