How we know this is a scam:
a guy approached me
That's a red flag, its how many scams start
claiming to mine bitcoins
That's another red flag, real miners don't approach strangers asking for $700 investments.
multiplying my bitcoins 10 times.
Another red flag, such big profits don't happen quickly - or at least are exceptional and cannot be predicted by a miner or investment expert or broker. In reality your $700 is almost as likely to turn into $70 as $7000.
the blockchain wallet after 24 hours showed me $7000 worth bitcoins
Another red flag. 10x gain in 24 hours never happens.
it was non-spendable
Another red flag. The scammer had altered the wallet to show someone else's money not money that you control.
What you see in a wallet isn't always real, a watch-only wallet or a watch-only / non-spendable address shows you someone else's money not yours.
The guy told me to give him half the commission
Another red flag, there's generally no such thing as commission in Bitcoin. Third-party business that act as a middleman may charge commision but you never really need to do business through a middleman.
now he is asking for a transfer fee
Another red flag, there's no such thing as a transfer fee normally. Theres a different thing that sounds similar - the transaction fee. But that should be a few cents.
Your questions
Is this a scam?
yes
How can I recover my initial investment?
You can't.
Beware. Now that you are known as having been tricked once. Other tricksters will contact you and offer to help you recover your money or tell you about marvellous people who can get your money back. All lies.
Where can I report him?
Local police.
They won't do anything for a $1050 loss though, other than provide advice and then update crime statistics, which may eventually lead to a change in their priorities.
How this happened
A bitcoin wallet doesn't contain money.
We talk about it as if it does but that's just a convenient shorthand, the reality is complex and its easier to talk about wallets as if they contained money. They don't, it's an analogy, a misleading analogy alas.
A bitcoin wallet normally contains a secret number called a private-key. That's the only valuable thing in it.
Bitcoin payments are made to Bitcoin "addresses". An address is just a number, it doesn't identify a place or a person. Normally your wallet generates addresses from the private key using a mathematical procedure that can't be reversed. Wallets also allow you to add other unrelated addresses you want to watch (see the balance and payments in and out). Without the private-key for those other addresses you have no control over money sent to those addresses.
Even though you created the wallet yourself, you then gave control over that wallet to a criminal. The criminal changed the wallet by adding an address to it that they controlled not you. This is called a watch-only wallet or a wallet that contains a watch-only address. Some wallet show this money as "non-spendable". Same thing.
If you give control over your wallet to someone they can extract and copy the private-key. They can create their own wallet and put that copied private key into it, giving their new wallet control over any money associated with the original wallet. They could also (or instead) put watch-only/non-spendable addresses into the wallet.
Changing the password on a wallet has no effect on any extracted copies of the private-key that the fraudster made when you gave them access to your wallet.
You should throw away that wallet. Any money put into it in future is under the control of the fraudster no matter what passwords you change.
You mention that you use your email-address to access your wallet. I hope you didn't give anyone the password to your email account.
You may have created a type of online wallet called a custodial wallet - these are the least secure types of wallet. A custodial wallet is controlled by a business not by you. If the business goes bust, is hacked or closed, you have no money.
The terms and conditions at Blockchain.com say
5.5.2 When you create a Wallet, you must: (a) create a strong password that you do not use for any other website or online service; (b) provide accurate and truthful information; (c) protect and keep secret all credentials for the Wallet; (d) protect access to your device and your Wallet; (e) promptly notify us if you discover or otherwise suspect any security breaches related to your Wallet; and (f) use the backup functionality provided through the Wallet and safeguard your backup files. You agree to take responsibility for all activities that occur with your Wallet and accept all risks of any authorised or unauthorised access to your Wallet, to the maximum extent permitted by law.
(My emphasis)
You didn't do this unfortunately.
