Sales Order bypassed credit hold even if customer was setup to default C1 Hold code

Hi,

We encountered a situation where Sales order is bypassing the credit hold even after the customer is setup to Default Hold code C1 by setting up Held Orders Code=C1 on Customer Billing Instruction Page 2.The Processing option of P4211 is also set to C1 for credit hold. The sales order was entered and put on some other hold (Customer Service) but it bypassed the mandatory credit hold C1 for this customer. It's a one off case,all other orders for this customer went on C1 hold.Please advise if there is any setup which could conflict or bypassthis hold. We are on