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I believe that it is a WWII era Prismatic Azimuth Circle Bearing Sight - a maritime device for measuring the bearing angle for navigation onboard a boat or ship. It was usually mounted over the helmsman's or navigator's/ship's compass. It is used for reading either true North or relative bearing angles. Aside from changes to increase accuracy, the basic device has changed very little since the mid(?)-1800s.
The German eagle indicates the Third Reich time period. The German eagle over M indicates Kriegsmarine.
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