Hi Ashish,
There do not seem to be many alternatives left if you do not want to run PPP (by the way, why are you trying to avoid it?). On serial interfaces, PPP is the only encapsulation that supports authentication. Ethernet-based WAN interfaces could theoretically support 802.1X but quite honestly, I have never seen a Cisco router configured as an 802.1X supplicant or authenticator on its Ethernet interface - I doubt it is possible.
On network layer, running IPsec could theoretically be a solution but especially if you have two routers connected directly, running everything over IPsec between them is not typical and would require some clever configuration to do.
This brings us back to the original question: Why is PPP not an option?
Best regards,
Peter