40Nm is what the old workshop manual says.. BUT IS WAAAAY under spec for a thread of that size that is rotating. Remember LH thread too, so you'll need a torque wrench that goes backwards or go by feel.
Put the seal flush to just proud. The inner lip runs on a bushing so doesn't really matter 'where'. There is nothing stopping you driving the seal in too far though and doing so will cover the oil feed for the crank. Probably not the best idea.
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