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Hi Amit, For the same question in murthy's the answer given was that h1 cap exemption can be applied in the case of my friend (cited above).

Hi, Friend of mine worked in USA on a H1B from 1998 to 1999. Then came back to India. Then again he had a H1B processed - valid between 2006 and 2009. Got it stamped on the passport. But did not use the visa and go to USA. Is he cap exempt now? Appreciate the feedback.