Exchange Emails

We have Exchange server 2007 enterprise Sp1 installed on windows 2008 standard. We have not given all the users in the domain to send emails externaly so their email address will be .local and some are allowed to send emails out.
lately we have been having problems like for example there is a user who has the rights to send emails externaly who is sending email to:xyz@abc.com and a cc:abc@test.local the mail goes out and the external smarthost server which is our ISP’s smart host rejects that email as it has mallformed email domain.
Kindly assist me in rectifying this problem.

Regards

Hitesh Dave