I have one like that but on the bottom of the shell there is an allen bolt that holds in the projectile.Just do what bug bunny gig and hit the bottom with a hammer and see what happens....
It appears to be a 20x110mm functioning dummy for one of several versions of 20mm cannon the US Navy used up through the 1970s; live rounds were produced in both percussion- and electrically-primed versions, but these all have a definite primer in the middle of the case-head, so yours is a dummy round, but with a filler so that it simulates the weight of a live round (something they used to test the feed systems on occasion); most dummy rounds in this calibre would look like the ones at http://www.gunbroker.com/auction/ViewItem.aspx?Item=147597018
Inert, or "dummy" rounds are typically dual tone (bronze bullet/metallic case) but I have also seen the entire case/projectile in the same silver/metallic or bronze coloration.
The 20mm is electrically fired and has a electrical primer in the base of the cartridge.
Based upon what you have there, the case appears to be a dummy without the electrical primer installed.
It also looks like someone may have painted the projectile red to resemble a Phalanx round (see link below). Go to "medium caliber ammunition".
Not all nations use or have used the blue = inert color code. Red could mean the same thing or something different depending on where and when this was made.
The MK coding is Britishy / Naval. It could be English or from a former colony that still uses Britishy terms for ordinance. It may have come from HMC (Heavy Mechanical Complex), Pakistan, although I have not been able to find anything about 20mm ammo from that facility.
It could be for the Mk 11 HIPEG aircraft gun, although I have not found much info on that system. I found some passing references, so it existed, but other than that I dunno.