Indeed after resetting as Vinod mentioned, I find that both the HDMI and Analog outputs are got.
The manual that came with the box was in Russian and found the english version online.
The HDMI audio output option is disabled in the player for some reason.
It would appear from these two options "HDMI audio output" and "Digital Output" it maybe possible to disable any one of these but the former is unavailable and the latter is only talking about how the conversion of the stored data is done.
I can live with having both outputs available as muting is easy (TV can be muted and the amp can be switched off as per need).
I was worried there is a problem with the unit and wanted to give it back to snapdeal. Now, will try to explore all the options.
Tried USB, an audio cd, mp3 cd and a vcd till now which worked out of the box. Youtube also worked well after connecting the player to my wifi connection.