The crowned shield with the armored arm holding a scimitar is the Austro-Hungarian era coat-of-arms for Bosnia-Hercegovina, which provided the inspiration for Handschar's collar patch devices.
For color renditions of this coat-of-arms, see, for example:
File:Coat of arms of Bosnia and Herzegovina (1878
In any case, this Fez has nothing to do with the Handschar Division.
Do you know if there is any way to tell if it is real?
Thank you any way