550 is not a valid mail box

Hi,
I am Using Exchange Server 2003 with email relay server using VIRCOM Modus Gate, hosted at my ISP.
I am facing a problem regarding Sending and Receiving of mails inbetween Exchange Server and Modus Gate.
Some of the emails sent by mail boxes (Rendomly of any user) from Exchange Server 2003 are blocked by Modus gate and are moved to quarantine folder and for the 100% dellivery I log into the control panel and releases the held e-mail by Modus Gate. Same is the case whie Receiving of the mails.

Further more when someone outside to my domain tries to send e-mail to a valid mail box and error message of Email delivery failure notification with following details arrives:

Note: [Orignal Domain names replaced by the fake ones]

---------------------------------Error Goes Here----------------------------------------

From: Postmaster [mailto:postmaster@sendparty-domain.com]

Sent: Wednesday, October 15, 2008 4:22 PM

To: USER of sendparty-domain

Subject: [Postmaster] Email delivery failure notification

 

This is a delivery failure notification message indicating that

an email you addressed to email address :

-- user@target-domain.com

 

could not be delivered. The problem appears to be :

-- Recipient email address is possibly incorrect

 

Additional information follows :

-- 550 <user@target-domain.com> is not a valid mailbox

 

This condition occurred after 1 attempt(s) to deliver over

a period of 0.00 hour(s).

 

If you sent the email to multiple recipients, you will receive one

of these messages for each one which failed delivery,  otherwise

they have been sent.

---------------------------------Error Message ends here--------------------------

Any one on the forum heaving such experiece can share His/Her precious views and comments.

Regards,
HR