(1) Ex-Naval personnel who have been absorbed permanently in the Coast Guard will be allowed to wear Good Conduct Badges earned by them in the Navy. They will also be allowed to count their former service for the award of Good Conduct badge in the Coast Guard subject to a maximum of 3 Good Conduct Badges. Ex-service personnel other than ex-naval personnel, will however, count their time for award of these badges from the date of entry into the Coast Guard service.
(2) Re-employed naval personnel will not enjoy any benefits of former service for the award of Good Conduct badges. They will count their time for the award of these badges from the date of entry into the Coast Guard. However, they will be permitted to wear the Good Conduct Badge(s) earned by them in the Navy without any monetary benefits. These badges will not be worn by persons who have been awarded punishment of detention or reduction to the rank or to a lower rank. The badges may be re-worn in accordance with sub-rule (2) of rule 40.