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Try to go with to_char after to_date, that would keep datatype consist and you might get required format.
ok...thanks. Was able to figure it out....
works for me
<?xdoxslt:ifelse(REFFDATE ='Commencement','Commencement', xdoxslt:format_date(REFFDATE,'MM/dd/yyyy','dd-MMM-yy', 'en-us', $_XDOTIMEZONE))?>