How does rails compiles the application.scss to public/aplication.css?

How does rails compiles the application.scss to public/aplication.css?

I am using rails 4 with sass rails
gem "sass-rails", "~> 4.0.0"
I upgrade a hello rails application from 3.2 to rails 4.0. I have an
application.css.scss file and running rake assets:precompile I don't get
any errors, there is a file public/application.css from a previous
precompile command I guess and from my broswer I can see that is the one
rails loads. The problem is that is not been updated. How can I compile
the application.css.scss over a previous one.