David Gilliland responded to penalties handed down by NASCAR on Wednesday by saying his team was '100 percent' in the right.

DGR-Crosley Racing was handed an L6 penalty for violating NASCAR's preseason testing policy for the K&N Pro Series East division. Gilliland's team conducted a test on Jan. 14 at New Smyrna Speedway with Ty Gibbs, the 16-year-old grandson of Cup Series team owner Joe Gibbs.

A NASCAR spokesperson confirmed to Autoweek on Wednesday that the penalty was the result of the team using the division's Robert Yates spec engine at a track currently on the K&N Pro Series East schedule -- a violation of the rule book, Sections 12‐5.3.7 and 12‐5.3.7.1.5.

Gilliland and Gibbs were each suspended three races and car chief Chad Walters was suspended indefinitely. DGR-Crosley was also docked 100 owner points for the No. 17 entry that won the championship last season with Tyler Ankrum.

Gibbs has been docked 100 driver points. Gilliland, Gibbs and Walters have each been fined $5,000 apiece. The L6 penalty is the most severe in the history of the K&N Pro Series.

However, Gilliland claims NASCAR was wrong to penalize his team because this wasn't a K&N test, but rather an ARCA test.

"What we did was a 100 percent legal ARCA test," Gilliland said on Thursday night on SiriusXM NASCAR Radio. "Currently, as far as 2019 goes, DGR-Crosley does not own a single NASCAR license, not a crew member, owner or driver license. What we do have is an ARCA license, and Ty Gibbs had an ARCA license, and what we did was a 100 percent legal ARCA test. Those are facts. That was our ARCA team there. We're going to run the ARCA race at Daytona and Pensacola with Tanner Gray. We own ARCA engines and we own K&N engines."

ARCA's testing regulations are open, with the exception of the week leading up to a race at any given venue, and allow for any engine package to be tested. NASCAR purchased ARCA last summer and plans to merge the two rulebooks together in a yet-to-be-revealed fashion.

From that standpoint, Gilliland says NASCAR had no jurisdiction over the New Smyrna test because it was an ARCA driver, ARCA car and ARCA team -- even though they used the NASCAR-approved spec engine.

"My question to NASCAR is why they didn't scan the chassis when they were there," said Gilliland, who wasn't at the test. "Like, has this car ever been physically entered as a K&N car? It was an ARCA car, we were on the ARCA Racing Series tire and we were 100 percent within the ARCA rule book because I didn't want to have any issues."

But since the test took place on a track that will host the NASCAR K&N Pro Series season-opener in just over a week, with a car that included the K&N engine, NASCAR says that indeed does fall under its jurisdiction.

But Gilliland said his team was only using the engine because it was more affordable than the Ilmor 396 ARCA spec engine of choice, and the foundation of NASCAR's NT1 Truck Series power plant. Gilliland was also adamant that it didn't matter in his eyes because this was a brake test.

"They're the same block, both LS1 blocks and this engine was mileaged out," Gilliland said. "The K&N engine costs half less to rebuild than the Ilmore engine so for testing purposes, we have a carb that makes them equal to horsepower, so it was an affordable way for us to turn laps at a much lower cost."

No date for the team’s appeal has been set. If the appeal is not heard before the Feb. 10 K&N Pro Series East opener at New Smyrna, all three would be allowed to compete.

Reigning NHRA Pro Stock champion Tanner Gray is scheduled to be the team's full-time driver. Chris Lawson is the team's crew chief.

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