Position rack in center of oven and preheat to 450°F. Mix flour, baking powder, sugar, mustard and salt in large bowel to blend. Add butter and shortening; rub with fingertips until mixture resembles coarse meal. Whisk milk, chives, and dill in medium bowl. Pour into dry ingredients; stir until moist dough forms. Mix in 2 cups cheese.
Turn dough out onto floured surface; knead lightly to distribute cheese evenly. Roll out dough to generous 1/2-inch thickness. Using floured 2 1/2 inch cookie cutter, cut into biscuits. Gather scraps; roll out to generous 1/2-inch thickness and cut out additional biscuits.
Transfer biscuits to heavy large ungreased baking sheet. Top with 1/2 cup cheese. Bake until biscuits are golden, about 15 minutes. Transfer to platter. Serve warm or at room temperature. (Can be made 6 hours ahead. Let stand at room temperature. If desired, wrap biscuits in foil and rewarm in 350°F. oven for 5 minutes.)
