I would have to say neither one of you are correct. Typically when there is a discrepancy of this nature you refer to the picture. In this case Figure B-7 shows the tape passing directly over the navel. Using the wording in the paragraph B-4 “measure…against the skin at the navel” and Figure B-7 it is apparent to me that the tape goes over the navel.
I believe you and the acting CSM are both trying to ensure Soldiers are treated fairly and according to regulatory guides. I would recommend a professional discussion on the matter and then whatever comes out of that discussion is the answer. If the he pulls rank, be humble and professional and execute his direction. Also execute it with a positive attitude. I would encourage you to make a memorandum for record that contains the details of the conversation and discussion in case you are later questioned by the CSM about taping procedures.