I haven't watched it beyond the replays they showed during the game last night, but I thought that was a foul on Carmelo. The only argument against it would be that the refs were calling the game very loosely all night, and that wasn't blatant...but it was a foul, and it wasn't even a really soft one.
My problem was more with KG's pick, which was also a blatant foul. But, it is also something that he does all the time, and something he gets away with a lot down the stretch.
Basically, I think the C's benefitted because Melo happened to throw that elbow right when the ref was staring at him, and no one was watching KG's legs on that play.
Let's just remember this though, when those 50/50 calls go against the C's later in the playoff run.