If you are trying to create a local ref for a entity bean inside a session 
bean, then this piece of code

  |  <ejb-local-ref>
  |             <ejb-ref-name>ejb/Book</ejb-ref-name>
  |             <ejb-ref-type>Entity</ejb-ref-type>
  |                     <local-home>BookHome</local-home>
  |                     <local>Book</local>
  |             <ejb-link>Book</ejb-link>
  |          </ejb-local-ref>   

should be declared as part of the session bean configuration:

  | <session>
  |  <!-- All the session bean related configuration, goes here-->
  | .....
  |  <!-- Local reference to the entity bean goes here -->
  |  <ejb-local-ref>
  |             <ejb-ref-name>ejb/Book</ejb-ref-name>
  |             <ejb-ref-type>Entity</ejb-ref-type>
  |                     <local-home>BookHome</local-home>
  |                     <local>Book</local>
  |             <ejb-link>Book</ejb-link>
  |          </ejb-local-ref>   
  | </session>

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