You are right, this a Palencia product with a damaged “N” in FNP.
The Palencia factory was established in 1937 as a branch from the Toledo arsenal. Machinery and workforce came from Toledo.
Anyway if the case is a fired one, reloaded later, it was most probably not loaded in Palencia. They have not reloaded ammo except during wartime.
One exception is the 7.92 mm dummy with FNP 1941 or FNP 1944 overstamped over “E K”. But I think that greek new cases, remaining from the civil war of 1936-39, were used. These were loaded as ball, dummy and crimped for blanks. It seems that only the greek cases were available in quantiites large enough to be worth using them.
In this thread you can find a box of Palencia wooden bulleted blanks. These are normally tinted blue, but red wood bullets are also known.