After spending hours trying to resolve the problem, I finally got the solution after contacting the Samsung Engineers. They checked out my APK's content and according to them:
"Regarding your inquiry, we would like to inform you that if the following use-feature exists in the manifest file, it is considered that the application uses S Pen SDK.
(uses-feature name="com.sec.feature.spen_usp" android:required="true"/)
Please note that you need to change ( and ) to < and > in your manifest file.
However the uses-feature does not exist in the manifest of your application, so it is considered that the application does not use the S Pen SDK."
After adding the feature to the app's manifest, the portal detected the SDK (Please See image), and I was able to publish the app. Note that I didn't include the SPen sdk jars to the app, neither did I reference any Samsung library within the app.
<uses-feature android:name="com.sec.feature.spen_usp" android:required="true"/>
EDIT: The app has been accepted but after second try. The first was rejected because under the Category section, I chose "Galaxy Specials > S Pen". They told me to change it to "Galaxy Specials > Other" since it had no S Pen functionality. So make sure you set accordingly.
Update 2020:
Under the Category section in "App Information" just choose "Galaxy Specials > Multi Window".
Then in your manifest add these:
<uses-feature android:name="com.sec.feature.spen_usp" android:required="true"/>
<application
android:allowBackup="true"
android:icon="@mipmap/ic_launcher"
android:label="@string/app_name"
......>
<!-- for samsung multiwindow -->
<uses-library
android:name="com.sec.android.app.multiwindow"
android:required="false" />
<meta-data android:name="com.sec.android.support.multiwindow" android:value="true" />
<meta-data
android:name="com.sec.android.multiwindow.DEFAULT_SIZE_W"
android:value="480dip" />
<meta-data
android:name="com.sec.android.multiwindow.DEFAULT_SIZE_H"
android:value="800dip" />
<meta-data
android:name="com.sec.android.multiwindow.MINIMUM_SIZE_W"
android:value="200dip" />
<meta-data
android:name="com.sec.android.multiwindow.MINIMUM_SIZE_H"
android:value="400dip" />
<meta-data
android:name="com.samsung.android.sdk.multiwindow.enable"
android:value="true" />
<meta-data
android:name="com.samsung.android.sdk.multiwindow.multiinstance.enable"
android:value="true" />
<meta-data
android:name="android.intent.category.MULTIWINDOW_LAUNCHER"
android:value="true" />
<meta-data
android:name="com.sec.android.intent.category.MULTIWINDOW_LAUNCHER"
android:value="true" />
<activity
android:name=".SplashActivity"
android:label="@string/app_name"
android:theme="@style/AppTheme"
android:configChanges="keyboard|keyboardHidden|orientation|screenSize">
<intent-filter>
<action android:name="android.intent.action.MAIN" />
<category android:name="android.intent.category.LAUNCHER" />
<!-- for samsung multiwindow -->
<category android:name="android.intent.category.MULTIWINDOW_LAUNCHER" />
</intent-filter>
</activity>
.....
Your app should be approved now using this approach. Thanks