I've had the AI use smoke from a variety of systems, but it usually prefers to use its heavier artillery to pound me rather than waste its shots on creating smoke screens when it has mortars and batteries of 75/105mm howitzers for this job.
I remember seeing IA using offmap arty to lay smoke at least in the early turns of an (AI) assault.
Possibly too during meeting engagements, when the IA has uncovered a possible line of attack, but then rather sporadically.