OK, so both bays are for permit holders, but one also allows paid-for parking.
I suggest you write in to state you are a permit holder and can therefore park in both bays, but on the day in question when you returned and tried to park, the other parked cars meant you could only park as found by the CEO. Apologise for overlapping the two bays, but state that you will in future, ensure you are in either one or the other. Whether Edinburgh council pay any attention to permit holder problems is another matter, of course. I don't think you'd win this at the adjudicators.