Bring milk to a boil in large saucepan; add 1/4 cup butter and Gruyere cheese.
Stir until butter and cheese are melted; add grits, salt and pepper gradu- ally; cook, stirring constantly, until thickened.
Re- move from heat; beat hard for 5 minutes.
Pour into casserole; cool.
Melt remaining butter; pour over grits.
Sprinkle with Parmesan cheese.
Bake in 400- degree oven for 30 minutes.