Disiplinary Action Letter

I want to take disciplinary action on my employee who is smoking inside in company

As per as i concern a common circular should be drafted including the fine or penalty for all. & after that its implementation. It would have the legal evidence of your warning.

If your HR policies are already in place and circulated, then disciplinary action would be appropriate.
If this is his first instance, you can warn him with verbally. Next time, send a memo which will be on records. If the incident repeats, can take disciplinary action. You can also draft a common circular to warn other members in organization.