Rapid, irreversible changes of magnetic topology and sunspot structure associated with flares have been systematically observed in recent years. The most striking features include the increase of horizontal field at the polarity inversion line (PIL) and the co-spatial penumbral darkening. A likely explanation of the above phenomenon is the back reaction to the coronal restructuring after eruptions: a coronal mass ejection carries the upward momentum while the downward momentum compresses the field lines near the PIL. Previous studies could only use low resolution (above 1") magnetograms and white-light images. Therefore, the changes are mostly observed for X-class flares. Taking advantage of the 0.1" spatial resolution and 15s temporal cadence of the New Solar Telescope at Big Bear Solar Observatory, we report in detail the rapid formation of sunspot penumbra at the PIL associated with the C7.4 flare on 2012 July 2. It is unambiguously shown that the solar granulation pattern evolves to alternating dark and bright fibril structure, the typical pattern of penumbra. Interestingly, the appearance of such a penumbra creates a new delta sunspot. The penumbral formation is also accompanied by the enhancement of horizontal field observed using vector magnetograms from the Helioseismic and Magnetic Imager. We explain our observations as due to the eruption of a flux rope following magnetic cancellation at the PIL. Subsequently the re-closed arcade fields are pushed down towards the surface to form the new penumbra. NLFFF extrapolation clearly shows both the flux rope close to the surface and the overlying fields.