The Hadas branch emits a fragrant smell, and one who smells Hadasim in order to enjoy their fragrance recites the Beracha of "Boreh Aseh Besamim." It is indeed customary to smell Hadasim on Friday night and on Mosa’eh Shabbat, with the Beracha.
Is it permissible on Succot to smell the Hadasim which one uses for the Misva of Arba Minim (four species)? A person might choose to use the Hadasim for not only the Misva of Arba Minim, but also for the Misva of smelling the Hadasim on Shabbat eve and after Shabbat. Would this be permitted?
The answer is that Hadasim which have been designated for the Misva of Arba Minim become "off-limits" for other uses. It is therefore forbidden to intentionally smell the Hadasim set aside for the Arba Minim. Of course, one need not be concerned if while shaking the Arba Minim he happens to smell the fragrance of the Hadasim. The restriction applies only to intentionally smelling them to enjoy their fragrance.
Does this Halacha apply to the Etrog?
This issue is subject to debate among the Halachic authorities. According to some views, the Etrog differs from the Hadasim in this regard, because its primary purpose is for consumption, rather than fragrance. Therefore, when it was designated for the Misva of Arba Minim, its status as "Mukseh" ("set aside") applies only to consumption, which is its primary function, and not to fragrance. According to these authorities, it would be permissible – at least in principle – to smell one’s Etrog during Succot.
In practice, however, Halachic authorities generally discourage smelling one’s Etrog during Succot, due to a different concern. There is a separate debate regarding the question of whether one must recite a Beracha before smelling an Etrog on Succot. Ordinarily, a person who smells a fragrant fruit recites the Beracha of "Ha’noten Re’ah Tob Ba’perot." According to some views, however, one does not recite this Beracha before smelling an Etrog on Succot. It is therefore preferable to refrain from smelling both the Hadasim and the Etrog throughout the seven days of Succot, until after Hoshana Rabba.
Summary: One should refrain from intentionally smelling the Hadasim and the Etrog throughout the seven days of Succot.
