The "delinquent" ASI has been identified as Tejvir and the process of stringent departmental action, including his dismissal, was initiated on August 25, police said.
His partners in the extortion case -- constable Jagbir of crime branch and head constable of Delhi excise department Narender -- though are on the run, they said.
"Delhi Police has been taking exemplary action against such delinquent officers. Process of very stringent departmental action, including dismissal from Delhi Police, has already been initiated against the personnel concerned," police said in a statement.
They had demanded Rs three lakh from the smuggler Hasrat, who, however, paid Rs 1.63 lakh.
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"Tejvir gave Rs 25,000 to each of them, but insisted Hasrat to pay the remaining amount, but the local police reached the spot.
"Tejvir was caught on the spot with one loaded country- made pistol along with five live cartridges and Rs. 1.13 lac were recovered from him," police said, adding, search operation to arrest Jagbir and Narender has been launched.