Service creation by composing existing services and/or network resources is considered by Telecom and Internet industries as the trend for service provisioning in Next Generation Networks. Related research work is being carried out for years, and various service composition approaches have been proposed by different standardization organizations and companies catering to different network requirements. However, the requirements of automaticity, flexibility and runtime adaptation are still open issues for operators and service providers in the actual service environment. This paper, relying on a SCIM (Service Capability Interaction Manager) based service composition model, attempts to extend the Policy concept and introduces two additional functional modules, Capability Policies Repository and Policies Comparator, for addressing some of the automatic service composition issues in service provisioning process. With these extended policy and functional modules, the SCIM based model is enhanced with attributes of intelligence, flexibility and runtime adaptability: it enables delivering competitive and revenue generating service at a more rapid pace; reducing service creation and maintenance costs; and optimizing service lifecycle