S -> epsilon, can be present in CNF, if the language is containing epsilon.
No, start symbol should not be present on RHS.
Explanation:::
First to convert cfg to CNF, we have to check first whether the start symbol is occurring on the RHS of the production.
If it is so, then include a production S' -> S, and S' would be the new start symbol, else if start symbol is not occuring on the RHS, leave it as it is.
Now, check whether the grammar is containing epsilon or not, if it is containing then include production ::: start symbol -> epsilon, and this production would not be removed.
And after this, perform removal of epsilon and unit productions and then conversion.