Hello Mahesh,
basically VRF lite is a subset of L3 MPLS VPN.
VRF lite misses the MPLS backbone links: there are only VRF access links and to build a complete topology that span over multiple devices you need a dedicated logical link mapped in VRF between each of them.
With MPLS VPN, MPLS backbone links provide a forwarding path for all possible VRFs using a stack of labels where external label changes at each router hop and internal label represents the destination on the destination PE node.
For an ISP it is possible to integrate VRF lite to an MPLS VPN and it is interesting for providing a shared CE node (multi VRF CE is the other name of VRF lite).
the multi VRF CE can be shared between different co-located customers providing separation between them.
the multi VRF CE for N customers typically is connected with a L2 trunk to a PE node with N vlans on it and presents itself as the CE node in each VRF.
notice that the PE node is seen as CE from the point of view of the multi VRF CE.
A provider can think of using VRF lite as an edge/access layer, but it is difficult it will move from MPLS VPN to VRF lite for scalability reasons.
Hope to help
Giuseppe
