Bhopal Mukhiya was arrested at the Srinagar International Airport while he was on his way to catch a flight to Delhi yesterday.
Granting interim bail to the accused, the court in Budgam handed over Mukhiya to army authorities, who had moved an application to this effect, officials said.
The army authorities have informed the court that Mukhiya's custody was required by them for investigating the case, they added.
The soldier, who is posted with 17 JAK Rifles at Boniyar in Uri sector of Baramulla district, was arrested yesterday after security officials found two hand grenades in his baggage during screening at the main gate of the airport.
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Mukhiya reportedly told the security officials that a superior officer had handed over the grenades to him with the instructions to hand it over to a person at Delhi airport.
The security officials are likely to question the officer named by the accused soldier in connection with the recovery of grenades, the officials said.
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Meanwhile, according to FIR lodged against the soldier, a cache of ammunition was recovered from his possession during the screening besides the two hand grenades.
The recoveries included empty cases of 20 mm ammunition (two), 40 mm ammunition (two), 9 mm ammunition (two), 7.62 mm ammunition (two), heavy machine gun ammunition (two) and medium machine gun ammunition (two).
Four live bullets -- two each of 9 mm and MMG -- were also ecovered, a police official said.
A case under sections 3/4 Explosive Substances Act has been registered against Mukhiya.
"Everyone whose name figures in the statement of the accused will be a witness in the case and quizzed as per the established procedure of the army inquiries," the sources added.