what is level1 automation and level2 automation???

This is kind of general question for me. Automation is designed based on application and requirements.

Level 1 is generally referred to PLC/Controller, while Level 2 is conceived as the SCADA/HMI level.

Good question, one with many possible answers since not every customer has a similar idea what it entails.

The ISA S88/S95 standards include a model which can be used for a number of possible forms of Automation.

So is there a level for a bus interface or different levels of bus interfaces depending on the complexity of the information carried?

Whether the interface is bus or otherwise is nothing to do with Levels of Automation in my perspective.
Briefly , examples of levels of automation:
Using S88 terminology you can have in ascending order (and highly truncated)
Control Module -operator works the plant by using the Control Modules
Equipment Module or Unit Phases - operator works the plant by starting phases or operations
Recipe level - operator starts batches at the recipe level.

Seven or so years ago I came across these "levels" in a functional specification and scratched my head as to what they were talking about. So I called the person who wrote the spec and he clarified the term so I recommended that he define the terms "Level 1/Level 2" within the document which he did.

It drives me crazy to read these things without having any definition which supports their use. It makes as much sense to me to designate these levels 1,2,3.. as it is to say our threat level is "orange".

Level 1 -- Sensors, Transducers etc.
Level 2 -- PLC, Controllers
Level 3 -- SCADA
Level 4 -- MES
Level 5 -- ERP

Thank you, Shailesh! I'll save this list for future reference.

Now if I could only remember where I put my last list....

Multiple levels can be defined, depended on the required functionality. E.g. technology driven or business driven. I don't think we are at the level of a common standard as the OSI layers for IT.

Within the Process Control Systems community, lead a.o. by the LOGIIC project and WIB communities, one concept finding momentum is:
L1 indeed is sensors, etc.
L2, is the Process Control Bus (e.g. DCS),
L3 is the Process Control Network,
L4 is the Office Domain.

The question can also be reversed:

Automation in itself is not really a tangible term.
in real life, would you call the cruise control functionality a form of automation?

It might very well be.

In process industry the driving issues behind automation can be element like an aeging workforce who know every screw and bolt out of hand, to structurizing workprocedures/methods, lesser operating staff etc.

I come across commercial companies which call automation something alike a fancy remote control like functionality to fully integrated workflows interconnecting with commercial business systems. Although the required functionality is distictly different, it all falls under the 'magic' word: automation.

It boils all down to the fact that the term automation is in essence a means to get where you want to go to reach your intended target.