In case of configuring Martini mode VPN in internetworking mode on CPoS interface you have to provide ip address on the interface and also you can use HDLC encapsulation. If you dont provide IP address then in that case the VPN would come up but you are not able to ping from CE-CE.
No alarm is there as the VPN comes up but the link protocol between the customer and edge router does not come up.
Provide the IP address on the both the edge router interfaces and use the link protocol as HDLC.
The link protocol between the interfaces are unable to come up hence we are not able to ping the other side CE.