Choice E is incorrect for two reasons:
1: Meaning: Per the original sentence, a causal relationship is established through the use of word "since". This causal relationship is no longer evident in Choice E, this choice is not correct. Remember that the correct answer should communicate the intended meaning of the original sentence.
2: Modifier Error: Per OG12, comma + verb-ed modifier set up modifies the closest noun. In this choice, this modification implies that the modifier - "based on..." modifies laws of Physics. This does not make sense.
Please refer to OG12 # 56 for more reference on this error.
Original Sentence -
Many of the earliest known images of Hindu deities date from the time of the Kushan Empire, fashioned either from the spotted sandstone of Mathura or Gandharan grey schist.
Official Explanation -
Placement of the modifier "fashioned..." suggests that the Empire (the closest noun), not the images of the deities, was fashioned out of these materials...
Thus, in this sentence, per the official explanations for Choices A and C, the verb-ed modifier separated by comma modifies the preceding noun (Kushan Empire) and not the preceding clause or the subject of the preceding clause (images of Hindu deities). Thus, these choices are incorrect.
In regular English, comma + verb-ed modifiers modify the preceding clause. They behave in similar manner as do comma + verb-ing modifiers. However, GMAT goes against this practice as is evident from OG12#56. Since Official Guides set up the rules here, we incorporate these rules in our course curriculum and questions. If down the line, OG modifies this question and changes the explanation, reflecting that comma + verb-ed modifiers modify preceding clause, then we will change our curriculum and questions based on this rule accordingly.
While we are at this topic, also check OG12#28 for similar usage of comma + verb-ed modifier.
Correct sentence with Choice B - ...the Mochica developed their own elaborate society, based on the cultivation of such crops as...
Official Explanation of the meaning of the sentence - The sentence describes the elaborate society of the Mochica with a series of three features...
Take-away Message
Comma + verb-ed Modifiers modify the preceding noun.