I opened the project org.eclipse.wst.common.project.facet.core.xml and first changed then removed line with web module tag. Cleaned project and launched on Tomcat each time but it still didn't run. Returned line (as was) and cleaned project. Opened Tomcat settings in Eclipse and manually added project to Tomcat startup (Right click + Add and Remove). Clicked on project and selected Run on server....and everything was fine.