You need to put SET NOCOUNT ON inside the query statement:
sqlcmd -H-1 -S xx.x.xx.x -d MAS_ACT -E -Q "SET NOCOUNT ON; SELECT * from MAS_ACT.dbo.Test_SM_Header " -s "," -o "C:\reporting\SanMar\Header3.txt"
If you just need a CSV file output with no headers and no trailing output, the bcp utility will do:
bcp "SELECT * from MAS_ACT.dbo.Test_SM_Header " queryout "C:\reporting\SanMar\Header3.txt" -S xx.x.xx.x -T -t ","