If you received one BLACK and one CLEAR LED use the BLACK one for D1. The flat side faces to the RIGHT of the PCB when viewed as shown in the photograph.
If you received two CLEAR LEDs (3mm or 5mm) you can use either for D1 but the flat side faces to the LEFT of the PCB when viewed as shown in the photograph.


Take the clear plastic IR LED and bend the leads as shown - the flat mark on the LED body must face away from you when bending them and to the top/rear of the PCB when it's fitted:
Solder it in the place marked for D17. The leads need to be flexible enough to allow it to be pointed out of the case when it's assembled.