Service tax on job work

Dear Sir,

We are getting our goods painted from outside.  Vendor takes care of everything including the paint.  We are sending this under jobwork challan.  Our finished goods are taxable?

I think the vendor is not supposed to charge service tax  duty on the same.  This exemption is as per notification 8/2005 service tax. Since he is taking cenvat credit on the paint , is he supposed to pay/reverse any excise duty ?

Actually the vendor is charging service tax on his invoice and i wanted to re-confirm the same.

If anybody confirm this with notification then it will be highly useful.

Regards

C V Subramanian