Capt Jacques Hechter and W/O Paul van Vuuren told the commission's amnesty committee that Smit, the former head of the Narcotics Bureau, had become enraged when they refused to carry out his instructions.
Hechter said Smit had transferred him to another unit while van Vuuren was made the general's personal driver and gardener.
Smit appeared before a Truth Commission investigative inquiry last week to answer questions relating to the commission's continuing probe into incidents of gross human rights abuses.
The head of the commission's investigative unit, Dumisa Ntsebeza, told Sapa on Monday night that Smit would be questioned on Hechter and van Vuuren's allegations when he appeared at a second investigative inquiry scheduled for next month.
Ntsebeza said Smit was co-operating fully with the commission and had handed over an "enormous amount" of documents which were still being studied.
Hechter and van Vuuren and three other former security policemen have applied for amnesty for more than 40 murders.
Hechter testified that Smit's Mandrax plot followed a failed attempt by the security police to assassinate Mkhatshwa at Durban airport using a specially modified rifle fitted with a silencer and subsonic cartridges.
Mkhatshwa, now Deputy Minister of Education, was present at Monday's hearings and listened impassively as Hechter told of the elaborate preparations to eliminate the priest in the mid-1980s because of his prominent involvement in politics, particularly school boycotts.
"Because of his incitement of the youth there were many incidents of arson involving the youth. Mkatshwa was indeed a thorn in our flesh," Hechter said.
The instruction to eliminate Mkhatshwa had been communicated to him by Col Flip Loots, his immediate superior, who claimed that it came from Smit, then his commanding officer.
Loots, who attended the hearings, told Sapa on Monday he intended applying for amnesty.
Hechter said after being given the instruction to kill Mkhatshwa, he had approached the security police's technical section to prepare two rifles - a .308, which would be used if a long range shot was needed, and a .22, which would be used only at close range.
Through a tap on Mkhatshwa's telephone, the security police learnt that he was due to arrive at Durban airport.
He and van Vuuren had driven to Durban in a minibus, with tinted windows and curtains, armed with the two rifles and an AK47.
"We had his flight number and time of arrival. We arrived and parked in the parking area so that we had a clear view of the main exit."
They spotted Mkhatshwa walking out of the terminal and towards the area where the minibus was parked, but van Vuuren was unable to get a clear shot because there was a woman walking in front of the priest.
After Mkhatshwa walked past the van to his vehicle, it was decided to "eliminate" him on a road outside the airport using the AK47.
But the plan fell apart as they followed Mkhatshwa's car through a toll booth controlling access to the airport parking area.
"There was a car between us. The person in the vehicle had trouble finding the ticket to pay the toll. By the time he had paid we could no longer see his (Mkhatshwa's) vehicle.
"There were roads going to the South Coast, North Coast and the black township. We did not know in which direction he had driven. We took the North Coast road to Durban and returned home."
He recalled how Smit had later summoned them to his office to propose another plan to kill the activist, by kidnapping him and forcing Mandrax tablets down his throat so that it would look as though he had died of an overdose.
"Van Vuuren and I discussed the matter and decided that... after the previous fiasco ... we did not trust his (Smit's) approach.
"It was unlikely the operation could have succeeded. We would have had to kidnap Mkhatshwa and force the pills down his throat with great violence. Out of my experience, this instruction was realistically impossible.
"I said to him (Smit) I did not want to be part of this game any longer. There was a big explosion. (He) was very angry and transferred me from the unit. Paul was made a driver and had to look after his garden."
Mkhatshwa said he was prepared to accept the bona fides of the five amnesty applicants if they were prepared to help build "a new nation" and take the principle of social justice seriously.
He said he did not believe the approach by the five to the Truth Commission was "simply an exercise in seeking amnesty". He believed they had a genuine desire to repent for their deeds.