Excel Formula to reflect correct number sequence based on certain conditions

Hi excelforum Experts,

I have a daily report that takes much of my time dragging cells to make the number sequence correct. I am wondering if there could be someone that could help me create a formula based on the following conditions: Please see attached workbook.

1.) cell E7 - I manually put number "1" as my first line item (no formula needed).
2.) cell E8 - IF(A8="SJ","1",IF(A8="#","",MAX($E$7:$E7)+1)) (this is existing formula I used for the remaining cells).

Note: If you could notice the cell E7 to E32, the numbering looks good because the conditions based on the formula above are met. However, the succeeding numbering starting from cell E33 down to E79 are not good may be because I am missing something on my formula. This is the challenging scenario that I am referring to and I really hope that someone from here could help me. The numbering that I wanted in the column E can be seen in column D.

Thanks for helping me.

Warmest regard,
Arnel