It is R17.8 movement with a sterling silver case. I dont know what we call this type of case? Thank you for any advices.
I am not sure about your specific watch, but the only previous Omega I have seen with this sort of case was a "custom" job. A number of things on your case lead me to believe your case is such an example including the poor tolerances in the case construction, what appears to be welding of the case back rim and the omega markings inside the case which appear to be etched or engraved with a rotary type bit, which would be too modern for the proposed age of the watch (based on the serial number 1939-1940). Higher resolution pictures of the case back and markings might help.
Whats the purpose of the gasket on the back? I wouldn't keep anything from coming in through the gap at the stem.
Markings are modern. In addition, note how the triangle and letter "O" are on top of the dent. This indicates they were added later in the life of the watch. I am not an expert on hallmarks, but these do appear to wrong.