Neighbour nuisance

It is an issue of livelihood for him. He cannot be prevented from making a living out of his occupation unless the inconvenience/nuisance caused is substantial.

File complaint in municipal authority of your area against said neighbor who is doing harmful commercial activities in Residencial area which is not allowed 

A goldsmith's acid-based work can be considered a private nuisance if it significantly disturbs a neighbor's peaceful enjoyment of their property. This is because the acid work can potentially cause unpleasant smells, fumes, or other disturbances. Under the Indian Penal Code (IPC), a private nuisance is addressed, and a neighbor can seek remedies like a fine or even imprisonment for the offending party. Additionally, legal action can be taken to obtain an injunction preventing further encroachment or disturbance.