Need a script where traversing can be stopped based on level in layout.

In the context of the code in that example script, you could do this by adding an additional argument in the function definition (differences in red):

procedure(CCFoutputPolygonCentres(cvId myPort @key 
  (objType "polygon") (layerName "metal1")
  (transform list(0:0 "R0" 1)) (stopLevel 32)
  )

Then around each of the recursive calls to CCFoutputPolygonCentres you'd do something like this:

  foreach(inst cvId~>instances
    when(inst~>objType=="inst" && stopLevel>0
      CCFoutputPolygonCentres(inst~>master myPort
        ?objType objType ?layerName layerName ?stopLevel stopLevel-1
        ?transform dbConcatTransform(inst~>transform transform)
      )
    )
  )

(the second recursive call is in the mosaic loop further down, and a similar condition would be needed there)

Now when you call CCFoutputPolygonCentres() yourself, you could call it with ?stopLevel 2 (for example).

Regards,

Andrew