please suggest one IP in which priority encoder is an integral part of the design.

Sounds a lot like a homework question.

Priority encoders are used in a lot of different places. However I'm not sure that an explicit priority encoding component is used very often. In places where I've used them it's simply a series of if / else if statements in the code. To identify priority encoding one has only to look for an if / else if set of statements. Although it may also be done with casez statements. Priority encoders would be used anywhere multiple devices needs to access the same resource.