I just want to second Yankee's answer: You use this when someone suggests doing something you have no desire to do. It's NOT a literal suggestion to lie about your activities, and you don't use it to get out of doing something you SHOULD do. It's just a way to say "I don't want to do that."
I don't think I've heard that expression in 20 years. Do people still use it? CJ It is kind of a "pharse" (farce), I suppose, even though I'm sure you meant "phrase".