Hi, the alchemist is for combining lower tier books to make them higher tier. ex: If you put two headless 2 books in it, it will make one headless 3 book and have an average percent of the two books you put in. To apply dust to CE books you open you inventory, pick up the dust and click on the book with the dust.
Not really sure if you will get your book back. You would have to ask a staff member or make a support ticket HERE.