The section 4.1 from the XML 1.0 spec, Character and Entity References
http://www.w3.org/TR/REC-xml/#sec-referencesrefers also to the well-formedness constraint Legal Character that says
"Characters referred to using character references MUST match the production for Char."
pointing to
http://www.w3.org/TR/REC-xml/#NT-Char[2] Char ::= #x9 | #xA | #xD | [#x20-#xD7FF] | [#xE000-#xFFFD] | [#x10000-#x10FFFF]
and, as you can see #xC is not part of the Char production.
On the other hand, #xC is allowed in XML 1.1, see
http://www.w3.org/TR/xml11/#sec-referenceshttp://www.w3.org/TR/xml11/#NT-Char[2] Char ::= [#x1-#xD7FF] | [#xE000-#xFFFD] | [#x10000-#x10FFFF]
So, to conclude, as your document is XML 1.0 it does not allow the #xC character but if you specify <?xml version="1.1"?> in the XML header of your file then the #xC character is allowed.
Best Regards,
George