Can a company tax per diem and it still be considered per diem?

Sure. Remember - it's not the company that taxes the per diem, its the IRS. If the company pays you a per diem that falls outside of the IRS guidelines for being tax-free (for example if you are not staying overnight at the job site, or they pay you a higher rate than the IRS allows, and/or the assignment has lasted more than a year so is no longer considered to be "temporary") then the company must withhold taxes.