Can an engine ever play a novelty? Is there any instance in which, oe a possibility of,  that an engine can play a novelty in a game?
Yes, once it is out of its opening book, it will just start looking for good moves. That will usually happen later than a human is out of his/her book, but still, it is not impossible that a human will (unintentionally) follow a certain existing game, where the computer will make the first deviation. And in a computer vs. computer match, they're bound to either replay an entire existing game, or one of them will play a novelty at some point in the game.

However, if you mean 'an opening novelty with any significance for actual play', the answer is probably no. Unless specifically configured that way, it will follow its book and not play a spontaneous novelty on move 12, like a human would be able to do.