The crew members who were intercepted by Coast Guard on Wednesday night have been placed under arrest, they said.
The arrested have been identified as Ahmed Aadam Paleja (45), Iqbal Hasan Umi (41), Yakub Abubakar Thakra (43), Abdul Razzak Usmar Mandwani (32) and Yunus Aasam Bolim (30) - all hailing from Bhuj in Gujarat.
On Wednesday, the Coast Guard intercepted calls allegedly made through a Thuraya satellite phone on board 'MSV Yusufi' which came from Dubai on Tuesday.
The vessel was intercepted five nautical miles off Mumbai coast late on Wednesday night by the Coast Guard and a search yielded 400 imported cigarette crates, 33 live goats, mobile phone accessories and television sets.
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Those on board were handed over to the Yellow Gate police station yesterday morning.
The crew was reportedly in touch with a person identified as 'Usman' in Dubai, for whom these goods were allegedly being brought to Mumbai by the vessel, Coast Guard officials said.
"According to the crew, the engine of the vessel, registered at Kutch in Gujarat, failed after which it drifted towards Mumbai," an officer said.
After spotting Indian Coast Guard ships moving towards them, crew members panicked and threw the Thuraya satellite phone into the sea, the police had said.
The accused have been booked under relevant sections of Indian Penal Code, Cigarette and Other Tobacco Products (Prohibition) Act, Cruelty to Animals Act, Indian Wireless Telegraphy Act, Mumbai Police Act and the Indian Telegraph Act.