For those who may be interested, I'll post below what I found out about the origins:
Online Etymology website
American Heritage:1743, "the plea of having been elsewhere when an action took place," from L. alibi "elsewhere," locative of alius "(an)other" (see alias). The weakened sense of "excuse" is attested since 1912, but technically any proof of innocence that doesn't involve being "elsewhere" is an excuse, not an alibi.
Random HouseUsage Note: When used as a noun, alibi in its nonlegal sense of "an excuse" is acceptable in written usage to almost half of the Usage Panel. As a verb (they never alibi), it is unacceptable in written usage to a large majority of the Panel.
Alibi in Latin is an adverb meaning “in or at another place.” Its earliest English uses, in the 18th century, are in legal contexts, both as an adverb and as a noun meaning “a plea of having been elsewhere.” The extended noun senses “excuse” and “person used as one's excuse” developed in the 20th century in the United States and occur in all but the most formal writing. As a verb alibi occurs mainly in informal use.