here is my scenario:

MachineA -> eth0 -> MAC1

MachineB -> eth0 -> MAC1 (spoofed to the same MAC as MachineA)
MachineB -> eth1 -> MAC2

MachineB(eth0) connected to a remote network for PPP Over Ethernet (internet Link).

MAchineA(eth0) and MachineB(eth1) connected thru a cross linked cat 5 cable.

That is ,
eth0 in A and eth1 in B are on same network
eth0 in B is on another network.

My intention is to use both Machines A and B for internet link. but when i use MachineB for connecting to internet with eth0 with spoofed MAC address, my local network has problem . i am not able to ping to MachineB(eth1) from MachineA(eth0). Is this because of MAC address conflict ? I believe that same MAC address on two different network doesn't cause any conflicts . Please help me.

why are you trying to spoof a mac address? what do you think it will achieve? sounds like you actually want to look into ip masquarading with iptables.