Dress instructions don't specifically say, but the figure seems to indicate that it is aligned bottom edge on the seam, but that is the old NCD jacket.
For the new jacket I've never heard tell one way or the other, mine has them sewn on lined up with the top seam, but I have seen people with top, centered, and bottom, so I guess it just depends on who does the sewing.
Long story short: it doesn't really matter...