Yes, absolutely. In fact, we strongly encourage you to setup Xeams so it rejects invalid users. Try running Diagnostic Check under Server Configuration. One of the test will fail if your Xeams is configured to accept emails for invalid users.

In short, there are 3 ways to reject invalid users:

1. When using the SMTP Proxy server for incoming messages, you have to configure your actual (downstream) server to reject invalid users. As long as your actual server reject invalid users, the Proxy server in Xeams will also reject them. 
   
   If using the Regular SMTP Server for inbound, simply check "Reject Invalid Users" in the Relaying tab for SMTP Server Configuration.
   
   
   
2. Using Active Directory. Besides enabling the option in Active Directory, you also have to configure SMTP Proxy Server so it uses AD.
   
   
   
3. DRV (http://xeams.com/drv.htm) . This option only works when using the regular SMTP Server - not Proxy

If first two options are not available to you, we recommend using the regular SMTP server for inbound as well as outbound so you can use DRV.