After a lot of research I found that the seal has to go first and it has to be pushed in to click and lock into the seat. Failing to do so will result in fuel leak.
It seems that the seal was replaced before or at least tampered for some reason on my car. The way the seal was before wasn't correct. It wasn't fully inserted into the seat as per the above pic.
Anyway, I got all stuff to put it back together (finding the correct lube for the seal was another epic) and gave a go at it few days back.
Believe me it was such a nightmare to get the pipe into the seal
I just couldn't do it. The whole tank has to be pushed up in an angle to align with filler pipe and then seated in place to lock it up.
I just couldn't get the filler pipe into the tank. It is such a nightmare I gave up on it. I will give a go this weekend with another helping hand. It wouldn't be that difficult to this if car is on hoist.
If anyone has to replace fuel pump, my personal advise is to cut open the floor under the seat from inside the car. Dropping tank is risky, complicated and need expensive seals and locks.
I must say that the fuel tank setup is really stupid on Cougars.