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At first I created the RAID 1 logical array using the acu(array configuration utility) oh HP server. And started installing Centos. Installation proceeded but at the time of drive select it showed the two 500GB hard disks instead of one single raid 1 device. That means os couldn't detect the storage controller.
After a lot of googling and HP customer support I found the steps to do it.
HP B120i driver is supported from Redhat/Centos 5u7 onwards.