I think the only way he's got you on this is if you installed NM in the hoistway, on the exterior of the wall. Or exposed in any way in the equipment room. Technicaly, 620.21 could get ya, but just for the entrance to the equipment. As it does not mention NM being allowed in equipment spaces. A judgement call there, but not all the way to the panel. IMO And no, NM is not fire retadant, although I heard they are starting to think about it.
"Well - I oughta....." -Jackie Gleason