"AND" is an operator that uses bit data and not numeric values. It also functions as a string and not a secondary condition. Same goes for "OR" and "XOR".
If I get what you're doing, you're just looking to be sure the proper pallet is in correct? Seems you're also adding a condition of if both values are "0" or both are "1"... would your machine try to run with both pallets in or out of the machine? If not, then you could do a simple check at the top of the program for this:
IF[#1101EQ1.]GOTO1000 (Use #1102 for the other pallet)
GOTO9999
N1000
Then just run the program. If the value isn't "1", it will jump to N9999 and you can set an alarm up there.
It's just a part..... cutter still goes round and round....