We report 0.9-1.4 μm spectroscopic observations of NGC 1068 collected during the commissioning phase of the near infrared camera spectrometer (NICS) of the Telescopio Nazionale Galileo (TNG). These yielded the first extragalactic measurement of P$ $II (1.188 μm) line emission. In the central $0.75\arcsec\times2\arcsec$ the Fe$ $II / P$ $II line-intensity ratio is close to unity, similar to that measured in the Orion bar and a factor of $\la$20 smaller than in supernova remnants. This indicates that most of iron is locked into grains and, therefore, argues against shock excitation being the primary origin of Fe$ $II line emission in the central regions of NGC 1068. We propose the Fe$ $II / P$ $II ratio as a simple and effective tool to study and perhaps resolve the long debated questions related to the origin of Fe$ $II line emission and, more generally, to constrain the role of shock excitation in active galaxies.