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Combine the olive oil, garlic, smoked paprika, Cajun seasoning, salt, and black pepper with the shrimp. Toss and make sure the shrimp is coated evenly.
Heat a large saute pan over medium-high heat. Add some olive oil and bacon and fry just until the bacon starts to brown.
Add the shallots and bell peppers and saute until the shallots become translucent and the bell peppers soften.
Add the marinated shrimp along with any of the marinade to the pan. Cook the shrimp, tossing regularly until the shrimp is pink and cooked through.
Squeeze lemon juice over the shrimp and garnish with parsley if desired.
For the grits, combine the water, garlic, and salt in a large saucepan and bring to a boil over high heat.
Reduce the heat to a simmer, and slowly add in the cornmeal, stirring constantly to prevent lumps and clumping. Simmer over very low heat for 3-4 minutes, stirring constantly until thickened.
Turn off the heat, and stir in the Parmesan cheese and butter. Season with salt and pepper to taste.
To serve, place the grits in a bowl and top with the shrimp and peppers.