Hi Harish,
You can write a code inside the Inbound Proxy function module itself to do the data manipulation.I don't see any need of RFC lookup. RFCLookUp is mainly useful when you have to populate data to a standard structure (e.g. Standard IDOC) where you need to fill the data from PI directly.In proxy, you write your own code to select data from whereever you want. So you need not use look up in PI.
Suman