Stacey Brough, 22, had been opening shells with an oxyacetylene torch at his father's scrapyard in Whitley Bridge, North Yorkshire, when one - a 76mm high explosive shell used by light tanks and armoured cars - exploded in his face.
Mr Brough died instantly in the blast, on 13 September last year. His workmate, Shaun Hone, 29, who had been standing near by, was injured seriously.
The 24-ton consignment was thought to be safe but contained four 'live' shells which failed to detonate when used for target practice.
The inquest was told that the shells had been bought from another scrapyard, which had collected them from Warcop firing range in Cumbria. Its commanding officer, Colonel Richard Cliff, who arranged the deal, said it was to his 'eternal regret' that he had not sent out memos to workers about the danger of shells. He said ammunition should have never left the base.
The jury returned a unanimous verdict of unlawful killing. Afterwards, James Kendrew, the Brough family solicitor, said they would consider launching a criminal action against the Ministry of Defence.
The coroner, Dr Sydney Jacobs, said a file would be passed to the Crown Prosecution Service. He urged the Health and Safety Executive to immediately review the MoD's safety procedures.