Yes, they can be used. However, because the balls are squeezed between the two spinning tyres, the leather cricket balls will tear at the seams, which make them less cost effective than the JUGS Balls. Because it would depend on whether the seam or the smooth part of the leather ball contacted the tyres first, the delivery of leather balls will be very erratic compared to the JUGS Ball.
The JUGS Balls are uniform in hardness guaranteeing consistency of delivery and because of the dimples will react through the air like a seam ball.
Old leather balls can be used for fielding practice.