It's the solonoid for the emission control - it shoves air from the filter box through to the exhaust when you lay off the throttle to burn the excess gas.
You can remove it as well as the 1st/2nd max power limitation which is part of it and the backfiring from exhaust will stop.
It will probably require you to move the carb needle clip from 2nd to 4th, at least it did on mine. The SM has it on 4th already but stock S is 2nd from top (lean)