My analysis is below:

Lindane,
a chemical used for both agricultural and pharmaceutical purposes,
effectively treats maladies,
and it has long appeared [u]that it was safe for use on children,
but we now know that this is incorrect.

First, use of Present perfect is required to describe an action that started in the past and continues today. There are several mistakes here:
"has long appeared that it was safe for is wordy. "Has appeared" should be followed by an adjective (safe) - straightforward
Use of "for use on children' is unidiomatic. "Use to" is best to describe the action on children.

Also I think that the use of "this" in the non-underlined part is not correct. Demonstrative pronoun "this" should be followed by a noun. Alone can't be use to refer to a previous stated noun or clause.

According to 800score, the correct choice is D. However I think it is not correct to use Past perfect since there is no sequence of events.

My correct answer is the following:
Lindane, a chemical used for both agricultural and pharmaceutical purposes, effectively treats maladies such as head lice and scabies, and it has long appeared safe to use on children, but we now know that this belief/fact is incorrect

Lindane, a chemical used for both agricultural and pharmaceutical purposes, effectively treats maladies such as head lice and scabies, and it has long appeared that it was safe for use on children, but we now know that this is incorrect

A) has long appeared that it was safe for
B) has long appeared to have been safe for
C) has long appeared as being safe to
D) had long appeared safe to
E) had long appeared that is was safe to

IMO:- D

"Safe to use" is correct idiom. "Safe for" is to be followed by Noun. For e.g "Safe for Children" . Thus A & B gets eliminated.

"C" : being is awkward
"E" : "That is was safe" is ungrammatical

Thus we left with choice "D".

Experts , plz validate my reasoning.

No, D has has several issues as has been correctly pointed out by Rumikido3 in the post above.

sayantanc2k, AbhiGarg2007 Thanks a lot for your feedback..

A correct version of this exercise should be:

Lindane, a chemical used for both agricultural and pharmaceutical purposes, effectively treats maladies such as head lice and scabies, and it has long appeared safe to use on children, but we now know that this belief/fact is incorrect.

sayantanc2k, mikemcgarry, carcass, AbhiGarg2007
I would really appreciate if you validate my proposal.

Thanks a a lot

Rumi

I noticed your sentence in your previous post itself, and since I found that it is error-free, I referred the other user to your post. Following could be another correct option:

Lindane, a chemical used for both agricultural and pharmaceutical purposes, effectively treats maladies such as head lice and scabies, and though it has long appeared safe to use on children, we now know that this belief/fact is incorrect.

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