Hello Engit,
I just reviewed your file.
You have not set up inputs for your VAE model.
Also for your encoder model at the beginning you used keras instead of tf.keras.
there are some code changes which was required. I have updated and inboxed you, kindly go through and run your training model again.
One more hint, make sure to have a look at the epoch setting as it clearly mentions
If you used the mean loss metric suggested above, train the model until that is down to around 320 before submitting.
I am not stating your epoch number is incorrect but try reducing it and then train your model.
Let me know, if you were able to upload your model with updated training.
Regards
DP