Oracle Text

Counter target spell. If that spell is countered this way, exile it instead of putting it into its owner's graveyard. You may play it without paying its mana cost for as long as it remains exiled. (If it has X in its mana cost, X is 0.)

Card Rulings

10/4/2004 If you cast an instant or sorcery, it goes to its owner’s graveyard when it resolves.
10/4/2004 This spell can be used on a spell cast using Flashback.
8/1/2008 If you use this on an opponent’s spell which has Buyback, you may pay the Buyback cost as you cast it. If you do so, the card will go to its owner’s hand upon resolution. It will not go to your hand, nor to any player’s graveyard.