You are both applying the general rule and national guidance and nothing can go wrong if the management follow your advice.
It is permissible to apply a risk assessment approach to the situation though. If it is not the only staicase serving part of the building, if the public are not admitted, if the risk within the cupboard can be controlled, if there is adequate supervision, if there are no ignition sources in the vicinity and above all if the responsible person in a position to control, monitor and maintain the situation then it would probably be fine. After all even approved document B recommends that we allow a small reception office of up to 10m2 to be created within a protected staircase as long as it is not the only stair in the building