You are not able to do this due to the fact that the "Surface-Extryde-1" feature is not cutting the body.i.e, it should divide the body.
Make sure the surface edges does not lie inside the body.
See the model.
Part2.SLDPRT.zip 287.7 KB
If you want to only remove material at the extents of the surface, use the Thickened Cut tool.