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Create a clipping path using the bezier pen tool then make it a selection, invert it and delete the background. Or just import it into whatever program you are going to use to design with and the clipping path should do the work for you.
When applying a drop shadow using effects, then saving as an eps, the drop shadow is converted to a seperate object, this is where you get the box, its actually the image boundaries of the drop shadow element.
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