Stainless steel does not rust. I suspect it is not stainless steel, but rather just regular steel.
As to painting your exhaust, hi-temp paint is made, which will work for this purpose. Visit your local auto supply store, and inquire within. Cheers!
1979 CB750K (sold, 2012, but not forgotten)
1983 Kawasaki 440 LTD Belt Drive (sold, 2011)
1993 Kawasaki Voyager XII