diff --git a/label-application-rule-config-service-impl/src/main/java/org/hypertrace/label/application/rule/config/service/LabelApplicationRuleConfigServiceImpl.java b/label-application-rule-config-service-impl/src/main/java/org/hypertrace/label/application/rule/config/service/LabelApplicationRuleConfigServiceImpl.java
index 070c9558..9e42d284 100644
--- a/label-application-rule-config-service-impl/src/main/java/org/hypertrace/label/application/rule/config/service/LabelApplicationRuleConfigServiceImpl.java
+++ b/label-application-rule-config-service-impl/src/main/java/org/hypertrace/label/application/rule/config/service/LabelApplicationRuleConfigServiceImpl.java
@@ -164,8 +164,9 @@ public void deleteLabelApplicationRule(
       if (customRuleDeleted || systemLabelApplicationRule.isPresent()) {
         responseObserver.onNext(DeleteLabelApplicationRuleResponse.getDefaultInstance());
         responseObserver.onCompleted();
+      } else {
+        throw Status.NOT_FOUND.asRuntimeException();
       }
-      throw Status.NOT_FOUND.asRuntimeException();
     } catch (Exception e) {
       responseObserver.onError(e);
     }