Here is an alternative method using the Inclusion-Exclusion Principle.
If we hand out $14$ pencils to six people so that each person gets at least $1$ in such a way that person $6$ gets at most $3$ pencils, then we need to find the number of solutions of the equation
$$x_1 + x_2 + x_3 + x_4 + x_5 + x_6 = 14 \tag{1}$$
in the positive integers subject to the restriction that $x_6 \leq 3$.
As you observed, we can first give each person one pencil to reduce the problem to distributing eight pencils to six people so that person $6$ gets no more than $2$ additional pencils. Let $y_k = x_k - 1$ for $1 \leq k \leq 6$. Then
\begin{align*}
x_1 + x_2 + x_3 + x_4 + x_5 + x_6 & = 14\\
y_1 + 1 + y_2 + 1 + y_3 + 1 + y_4 + 1 + y_5 + 1 + y_6 + 1 & = 14\\
y_1 + y_2 + y_3 + y_4 + y_5 + y_6 & = 8 \tag{2}
\end{align*}
where equation 2 is an equation in the nonnegative integers subject to the restriction that $y_6 \leq 2$. Moreover, equation 2 has the same number of solutions has equation 1.
If we do not restrict the value of $y_6$, then the number of solutions to equation 2 is the number of ways we can insert five addition signs in a row of eight ones, which is
$$\binom{8 + 5}{5} = \binom{13}{5}$$
However, we must eliminate those solutions in which $y_6 \geq 3$. Suppose $y_6 \geq 3$. Then $z_6 = y_6 - 3 \geq 0$. Then the number of solutions we must eliminate is the number of solutions in the nonnegative integers of the equation
\begin{align*}
y_1 + y_2 + y_3 + y_4 + y_5 + z_6 + 3 & = 8\\
y_1 + y_2 + y_3 + y_4 + y_5 + z_6 & = 5 \tag{3}
\end{align*}
Since equation 3 has
$$\binom{5 + 5}{5} = \binom{10}{5}$$
solutions in the nonnegative integers, the number of ways $14$ pencils can be distributed to six people so that each person receives at least one pencil and person $6$ receives no more than three pencils is
$$\binom{13}{5} - \binom{10}{5}$$
As you can check, this is equivalent to the answer that Gamamal obtained by considering the cases $y_6 = 0$, $y_6 = 1$, and $y_6 = 2$ separately, that is,
$$\binom{13}{5} - \binom{10}{5} = \binom{12}{8} + \binom{11}{7} + \binom{10}{6} = 1035$$